I recognize that sometimes they will opt for more expensive hardware, what I am trying to say is that consoles have a budget, they aren't going to break through that budget... And sometimes a console manufacturer might make a priority of one component over another... Case in point the Playstation 4 prioritized Ram over the CPU.

But...  Even though they might choose something which is a little more expensive, doesn't mean it's high-end.

The Playstation 3 was a unique beast as Sony went all out on everything. - Did they really need to include the PS2 components when software emulation could have been sufficient?
Did they really need to spend an obscene amount of money on a CPU when a CPU more along the lines of what the Xbox 360 had would have been perfectly sufficient?
Did they really need to opt for their expensive memory setup?
Did they really need to include a card reader?

...And the price was reflected in that, to the point where some people needed a second job to afford such a console.

It wasn't until the PS3 went on a diet and cut out allot of that rubbish that it became more tenable for the masses, that was the big lesson that Sony learned with the Playstation 3.

In retrospect, PS should have launched 2 SKU's like they did, but in a different manner that was totally doable back then without simply saying they never should have used cell. It should have been the 60GB BC model for $599, along with a 20GB non BC model for $399. Based on the rise in sales once PS3 slim hit the market, a non BC model right off the bat would have solved a lot of the early sales problems. Games were going to be an issue for awhile no matter what until cell was better understood, but at least they could have kept some from jumping into the MS camp with a lower cost of entry. I would have to imagine that one change would have put PS3 within reach of 100 million.

I really don't think hard drive size could ever be used as a reason to buy a console. Ever.

If anything the fact one is an SSD and the other is a HDD and one is faster and the other is slower will make for more relevant talking points. When there are videos of games loading in half the time on one console vs the other no one will say " takes twice as long to load but at least you can store twice as many games at once though".

I think the most the consoles can cost will be $499. And even that may be pushing it.

I honestly wouldn't be surprised if we see a $399 SKU without a disc drive and 1TB of storage and a $499 sku with the disc drive and 2TB of storage. And then have an external disc drive as an accessory for around $79. 

In Microsoft and Nintendo's case, they did go for the cheapest.
Still this is a PS5 discussion and you were talking as if all always gone for the cheapest (still I don't think X1X with vapor chamber is the cheapest option they had).

I recognize that sometimes they will opt for more expensive hardware, what I am trying to say is that consoles have a budget, they aren't going to break through that budget... And sometimes a console manufacturer might make a priority of one component over another... Case in point the Playstation 4 prioritized Ram over the CPU.
They have a budget, but sometimes they can break it, Sony have always sold consoles for loss at launch (PS4 was just the lowest loser and still needed a game and PSN sold to have break even at launch).
But...  Even though they might choose something which is a little more expensive, doesn't mean it's high-end.
Between cheapest and high-end there is a world, of over 3000 USD difference if you were looking PC. So It is quite easy to see that for a performance they will look at best cost benefit, but as said they will look full gen not just launch.
The Playstation 3 was a unique beast as Sony went all out on everything. - Did they really need to include the PS2 components when software emulation could have been sufficient?

When they removed HW emulation the SW didn't make 100% compatibility, and quite possibly as Sony isn't a SW company they didn't saw it as an easy match to do it all by SW, because even after they manage to do it they removed later.
Did they really need to spend an obscene amount of money on a CPU when a CPU more along the lines of what the Xbox 360 had would have been perfectly sufficient?
Did they really need to opt for their expensive memory setup?
Did they really need to include a card reader?

...And the price was reflected in that, to the point where some people needed a second job to afford such a console.
The second job is quite the exaggeration, USD 499 for the 20GB isn't obscene nor really prohibitively expensive. And even so Sony lost over 200 USD per console sold. So you really lost all your leverage on always choosing the cheapest or even the most cost conscious option with PS3 example alone. But please explain the choice of DVD for PS2 at a time when DVD players costed as much as a PS2.
It wasn't until the PS3 went on a diet and cut out allot of that rubbish that it became more tenable for the masses, that was the big lesson that Sony learned with the Playstation 3.

One sneak peak into the next-gen console is that chinese console "subor z plus" which was released with a 4/8  core ryzen cpu clocked at 3ghz and 24CU Vega with 1,3ghz speed totaling 3,99TF.

But it's just really bad news, according to anandtech that SOC is just below 400mm2 die size and eurogamer says the console pulls 185watt this is on 14nm.

Since 7nm(high performing one) is 2x transistor density and 0.5 less power by just doing simple math we won't be getting anything higher than a 8/16 core ryzen cpu clocked at 3ghz with a GPU that has 8TF.

I hope this wrong though. But we might need to prepare we getting a very low TF console.

Sources:

"Using Crysis 3 to push the machine to max load, a 185W peak is drawn from the mains."

https://www.eurogamer.net/articles/digitalfoundry-2018-hands-on-with-subor-z-plus-ryzen-vega-chinese-console

I agree.
But by the same token, the Cell processor was completely unnecessary, Sony would have sunk a truck ton of cash into that design. (In collaboration with others of course like IBM)
Even if manufacturing costs were tenable, the R&D costs was a significant part of the initial high price... Towards the end of that console generation, Sony wasn't able to consolidate the GPU, CPU and such into a single chip like Microsoft did either, most likely because of nVidia.

They could have spent that extra R&D budget on say... More Ram or a faster GPU... Or. Lord forbid. A lower price.
But the Cell wasn't the only inhibitor to Sony hitting a lower launch price which is what I am trying to convey, so many aspects that just didn't need to be there or could have been dumbed down.

Obviously they didn't make the same mistake twice, the Playstation 4, for all intents and purposes and shortcomings had the right combination of hardware at the right price, it wasn't a high-end device though, but Sony did invest in components that will give the biggest bang-for-buck and they were rewarded for that with good sales.

You can get a Quad-Core Ryzen with 10CU's @ 15w.

The chips you are looking at though are desktop-equivalent parts which aren't binned for lower power consumption.

AMD's GPU's though are inefficient, that is where your power budget is going to be spent, wait for Navi or AMD's Next Gen architecture before seeing how things land.

Depends on how much of the die area is going to be dark to reduce leakage.

I think a single Ryzen CCX (Thus 4 to 6 cores) is what we will get next gen... And that is fine as even a Quad-Core Ryzen without hyperthreading will beat the crap out of an 8-core Jaguar or Cell.

Who cares? If TF was everything then it might actually be important, but it's not.

That is the power consumption for the entire machine.
The Xbox One X will do 172w from the wall playing Gears of War and the base Xbox One will do 107w.

https://www.anandtech.com/show/11992/the-xbox-one-x-review/6

So in that retrospect, 185w is fine.

The Xbox One X is a premium console with a higher ticket price to match, meaning components can take a step up on the ladder as it has a larger budget.
Vapor Chamber cooling isn't super expensive anyway... Now if the console used water cooling...

With that in mind, even the Xbox One X isn't using high-end components, it's a mix of low-end and mid-range.
I agree they haven't chosen the over the top or even high-end, but again not the least expensive.

$400USD is pretty much the sweet spot.
You aren't going to build a console out of $800 worth of components and sell it at $400 USD, that really doesn't make good business sense, they still need to stick to a budget.
I agree 400 USD is a good pricepoint and that it isn't good business decision to have it cost you 800 USD, still it didn't prevent Sony from doing it and along the gen cutting down cost.

Microsoft doesn't have 100% compatibility with Original Xbox compatibility on the Xbox 360. - Some games run with poor framerates, glitches and so on.
The Xbox One doesn't have 100% compatibility with Xbox 360 or Original Xbox games either, but what they are doing is rolling out the Emulation on a per-game basis and sometimes will go back and update older emulated games to improve framerates and fix bugs.

Sony could build a team and take a similar approach that Microsoft has done, but probably just can't warrant the expense or effort for a "Free" feature.
Sure Sony could, but SW and OS isn't their core business, they don't have the expertise and the expense wouldn't bring any additional revenue, so pretty pointless effort (even more when you talk about chosing the least expensive stuff).

It was $1,000 AUD here. Even the Xbox One X was $650 AUD.
Is it an exaggeration?
Keep in mind about inflation.

Ken Kutaragi did say that people will work "more hours" to afford a Playstation 3 remember.
https://www.wired.com/2013/02/sony-ps3-promises/
Exaggeration on finding a second job. It isn't really something that expensive, people buy 1000 USD phones every two years.

And people took out of context and distorted. He was more like saying that the PS3 was so good and had so much value that people would WANT (not SHOULD) to work more to buy it and that would improve economy in the world.

No I haven't. Because I said the Playstation 3 was an exception.
No, you accepted it later when pointed out, your initial post was that NEVER done it.

The PS2 launched at $299 USD. Are you suggesting that the component costs of the consoles could have been $500-$600 USD?
Not entirely sure who manufactured the PS2 DVD drives (I haven't exactly looked into it, but feel free to) but if Sony was the drive manufacturer, then they could have saved costs directly that way.

Even then as you well know, the Playstation 2 didn't have loads of Ram, didn't have a super large and expensive CPU or GPU.

Still DVD drive was more expensive than keeping CD, but they chose DVD for PS2 as they chose CD for PS1 when it was still more expensive than other solutions, because they had a target. Also PS2 launched for much less than it costed to produce. Up until now every console Sony made costed them more at launch than it was sold at, with PS4 being the one with the smallest GAP and fastest to be profitable on the HW itself. You can check if you wish.

You can get a Quad-Core Ryzen with 10CU's @ 15w.

The chips you are looking at though are desktop-equivalent parts which aren't binned for lower power consumption.

AMD's GPU's though are inefficient, that is where your power budget is going to be spent, wait for Navi or AMD's Next Gen architecture before seeing how things land.

Depends on how much of the die area is going to be dark to reduce leakage.

I think a single Ryzen CCX (Thus 4 to 6 cores) is what we will get next gen... And that is fine as even a Quad-Core Ryzen without hyperthreading will beat the crap out of an 8-core Jaguar or Cell.

Who cares? If TF was everything then it might actually be important, but it's not.

That is the power consumption for the entire machine.
The Xbox One X will do 172w from the wall playing Gears of War and the base Xbox One will do 107w.

https://www.anandtech.com/show/11992/the-xbox-one-x-review/6

So in that retrospect, 185w is fine.

The Subor also doesn't have the same low level API the consoles have, which would lead to more power consumption to get the same results. Put a comparable 2TF PC up against a PS4 and not only is it going to struggle to try and match it, it's going to do so at a much higher price, while consuming more power. Navi will definitely improve on performance per watt, and probably more than you would expect if PS is directly involved, otherwise PS5 might as well just use Polaris or Vega.