I think a $400 console is not only possible but probable. It'll be easier on Microsoft, but I think it'll be possible given the modest specs of both systems. The most expensive aspect of either console next gen will be the CPU and GPU and they don't even appear to be that expensive.
Depending on what memory is being used, the memory could be cheap. The HDD is inexpensive. The Blu-Ray drive will be inexpensive. Again the most expensive thing will be the CPU and GPU and both of those decrease dramatically over time.







