Sony is in bad financial shape and can not afford to take large losses, and Microsoft is no longer able to sell large losses in the videogame business to investors, so consumers are going to face a price that better matches the true cost to manufacture these systems. To put this in perspective, a repeat of the "XBox 360 strategy" would (likely) result in a system that was close to $600; and a repeat of the "PS3 strategy" would (likely) result in a system that is close to $900.
Now, if Sony and Microsoft target the broder market expect them to want to bundle an expensive new controller and sell the system for under $400; which means that Microsoft would (probably) have to cut the manufacturing cost in half compared to the XBox 360 at launch, and Sony would have to cut the manufacturing cost by 2/3 compared to the PS3 at launch.
With that said, there is room to improve their consoles but Sony and Microsoft will either produce a more modest improvement or a more expensive console than people are expecting.