Between aus $500- $600 would be perfect. If they released a $800-$1000 machine like they did with the ps3 in australia. Im going to find it hard to justify a purchase.

I kind of have a bad feeling from their E3 interviews that they are going to misread the market and put it at some crazy price, or have some inhibiting hidden cost like the Vita, but I'm guessing for their sake that it will between $350-to-$450

$400 normal model
$450 Superior model with more HDD space and other stuff.

$400 for the basic SKU.

I guess it will be $399. If they continue to use the same (good) controller design as with PS1/2/3 they should be able to launch a console around 2x as strong as the WiiU, while still maintaining an acceptable price. I think any price over 400$ is going the hurt them (while $450 still COULD be accepted by a big enough amount of people to sell enough consoles), since there won´t be major perceptible differences between Orbis and WiiU at first (Well developed WiiU game vs Orbis launch game), in fact by them 1-2 WiiU games could even look better than an Orbis launch game. Most people outside of the internet don´t care about graphic that much anyway, so the little differences between the two consoles won´t matter for them.

I see your reasoning, but I think there are far too many unknowns to make predictions like this ...

With Playstation Move and Kinect I think it is clear that both Microsoft and Sony are very interested in capturing the broader market than there was at the launch of the PS3 or XBox 360. I would argue that it demonstrates a change in mindset away from thinking that the "hardcore" determines what is popular/successful with the broader market. How this change is reflected in the systems they produce has yet to be seen but it could impact either manufacturer in pretty dramatic ways; both for better and for worse.

Essentially, I don't think we will get 2 $400 systems with high end hardware that (only) use conventional controllers in the next generation. I suspect there will be a movement towards bundling other control mechanisms with the system (Kinect or Move as an example) and the companies will make a choice about whether to release a more powerful or a more affordable system. Depending on the control mechanism they choose, and depending upon the price of the system, either system could end up being more popular than the other; and both systems may end up being popular or unpopular.

I said $450.
Basically Sony has to be close to Microsoft in terms of system specs so that they can cater to 3rd parties but at the same time they won't sell a console at the same price as the PS3.

This should be very doable as the production costs for Blu-Ray are way down and Sony will likely use more standard parts this time round.