I think we'll see a $425-$550 range for PS4 to start. It's a much cheaper project than PS3. They'll lose a little, but not like the hundreds per unit on PS3. It's a much better strategy than PS3.
The razor/blade strategy has never worked really well in gaming. Sony and MS wouldn't even be in gaming if they weren't part of a larger corporation - the gaming divisions on their own would have gone bankrupt long ago. Consoles can launch at small losses but they need to get their costs down to profit quickly. The razor strategy can move systems, but it doen's make money.
The model that does seem to be working in some cases is the cell phone model, with subscriptions for Live or WoW biringing in lots of cash. This scares me, as it's a great way for companies to milk money out of us and we don't even notice.
