RX 5700 on Amazon - $350
Ryzen 5 3600 on Amazon - $199

The cheapest ZEN 2 CPU and Navi GPU available for PC's, (that's also a 6 core CPU, while the PS5/Scarlett will have 8 core CPU's) and the total comes to $549. Of course they don't cost that much to make, and the PS5/Scarlett APU's will be cheaper to make then these individual parts too and the console don't need to have a large, or even any, profit margin. But add in the cost of HDD, SSD, Optical Drive, Controller, Wifi/Bluetooth, Case, PSU...

There's no way these machines could be less than $499 without absolutely haemorrhaging money or being a lot less powerful than anticipated.

Launch Prices Adjusted for Inflation:

Nes - $473
Snes - $374
N64 - $324
Gamecube - $287
Wii - $316
WiiU - $389
Switch - $312

PS1 - $502
PS2 - $444
PS3 - $634 (20gb), $761 (60gb)
PS4 - $438

Xbox - $432
Xbox 360 - $392 (No HDD), $523 (20gb HDD)
Xbox One (w/ kinect 2) - $548

So a $499 price point today would be cheaper than the 20gb 360, 20gb and 60gb PS3, PS1 and Xbox One.

The price I am willing to pay depends a lot on what games the system has.  If I had to pay $500 for a system to play Breath of the Wild, then I probably would have done it.  But then again I had been waiting 25 years for a game like that.  It's very rare for a game like that to come along.

Then I look at where Playstation is heading.  I have been really, really disappointed with the PS4's game library.  The franchises I like are either getting worse, or just getting discontinued.  And new franchises I like are not replacing them.  I used to buy Playstation just to get the latest Final Fantasy game.  Now I don't even care about Final Fantasy anymore.  Kingdom Hearts 3?  Well, I feel like I'd have to spend several hours just to understand the story between KH2 and KH3.  That is work and not fun.  No thanks.  Western games in general kind of suck to me (mostly); I've always prefered Japanese games.  So Playstation is looking less and less attractive.  At $400 I probably wouldn't get one at launch.  At $500 I just plan on waiting for several years, and even then it is mostly a device for movies and streaming once I actually get one.

I only have enjoyed 4 games on the PS4 (Uncharted 4, Dark Souls 3, Spider-Man, Undertale).  They need to get some radically new and better type of games to get me excited for PS5.  Right now I am playing my PS2 a lot.  There are tons of games on the PS2 that I overlooked originally, but are actually pretty fun.  And I can often get them for $10 or so (give or take).  I can play a fun racing game like Need for Speed or Burnout.  I am sure I can play games like this on the PS4 or PS5, but why would I?  It's just a graphical improvement.  Where is the new experience?  I am looking for games that give me a new experience.  PS4 was really lacking in that.  Uncharted 4 actually is a much better game that Uncharted 1 even if the graphics were the same.  But most other franchises are not that way.  If I play Need for Speed on PS4 or PS5 it might not feel any better than the equivalent game on the PS2.

For me the biggest problem with PS5 is that it needs new experiences, new types of games.  Now, if you want to talk about a business perspective, then I think a $500+ price tag is just dumb.  But for me personally, I would pay that if the games were good enough.  On PS4 the games are nowhere close to that.  AAA third party games are seriously slacking nowadays.  I'm not going to pay much for a device that focuses on AAA third party.  For me, I need Sony to bring some new and fun games to PS5.  Microsoft just bought a bunch of new studios, and Nintendo is currently killing it with the games they are bringing to Switch.  Sony needs to step up their game.  Don't get me wrong.  They have some good games, but they need more.  Third party is not cutting it right now, not for me anyways.  I need Sony to bring in some better games.

My last phone cost me about $170. It's perfect for me. Phones seem to be the one industry where the unnecessary luxury products are somehow the main focus instead of the niche.

Everyone going out and getting the latest Samsung Galaxy or Iphones would be like every gamer going out and getting a GTX Titan.

My phone was free and I'm perfectly happy with the power of the Switch.  

Fact of the matter is, if I wanted the best power for gaming I wouldn't buy a console, I would build a PC.  I (and millions like me) go consoles because it is cheaper and easier.  The problem with Sony going $500 for the ps5 AND charging $60 a year to play online, suddenly the cost start rivaling/matching a PC build.  Five years of PSN+ is $300, plus that $500 sticker price, $800.  Yeah, I'd build a PC.  

For an equivalent PC I have no doubt you would be looking at spending a lot more than $800.

Maybe, maybe not, frankly I don' think the ps5 is going to be as powerful as rumored.  Prices of a nice GPU have been high in the last few years.  Either way the ps5 will probably need an external HDD for $100, like my ps4, so put the ps5 at $900.  What I could or could not build at $900 remains to be seen.    

Either way you are intentionally missing the point.  The price of building a PC won't look as daunting if Sony goes $500 and continues to charge for online.  For Sony to continue to receive my support either the console needs to be cheap or online needs to be free.  I am not supporting expensive console AND having to pay for BS online.  

The price will be a hard price to swallow at first its better in the long run, looking that the ps4 and xbox one now the games arent keeping up in terms of performance and in most cases visuals res are taking a hit when it comes to third party games. So i'll happy pay more knowing that in 5-10 years down the line that wont be an issue.

I expect these consoles to be $499 so meh.

Lol, I said GTX Titan instead of RTX Titan just so more people would understand what I was actually talking about. I don't think RTX is as widely recognised as GTX yet.