IMO, they should have gone with even cheaper hardware. Much cheaper.
Sony is going to launch a console with a possible price of 500 Euro in it's biggest market Europe; which will be having a depressed economy for the next 5/10 year.
The mainstream accepted price for a console is around 300 euro. Living in Europe myself, i would say it's even around 250 Euro at this moment. Money is in short supply here.
In the wilderness we go alone with our new knowledge and strength.