Although I'm more keen on the ps4 than xbox one nothing could be worse for Sony to dominate this generation. A monopoly means poor value to the consumer. I think Microsoft already stated they will price adjust their console if they have to. So they have given pre-warning that they will do it. I don't think Microsoft has any intention of not fighting with the ps4 and lets not forget Microsoft have deeper pockets for this fight. The xbox one is clearly cheaper to make than ps4 for the console itself and may even be cheaper even when you factor in kinect as its really just a small plastic box with a microphone and a couple of optical sensors. All the processing is done externally in the xbox one using the standard chipset, hence why a portion of the gpu and 1 of the cpu's are used for kinect.
Microsoft also seem more keen to extract funds from users with in game transactions, DLC etc and their xbox live service is more expensive with less features and benefits. They also have more features behind a paywall so its harder not to have the xbox live gold service. I'm just making the point this extra source of revenue can be used to help subsidise the console purchase price.
