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ICStats said:

If Sony can sell PS4 with a more powerful GPU and 8GB GDDR5 memory for $399, then MS should be able to get the Kinect-free XB1 below $399 soon.

You're missing that, not accounting for Kinect, PS4 is NOT significantly more expensive than XBone to produce.

Their GPUs are the same size, which is primary determiner of cost, but the PS4 uses that for more GPU Compute Units and ROPs, etc,

while XBone uses it for a special memory cache to make up for their use of slower memory. 

DDR is somewhat cheaper than GDDR, but GDDR prices dropped significantly from when MS made their design choice,

and Sony in fact just bought a memory factory, so they can make their own.  The memory technologies are not fundamentally different,

it is just a matter of how they are arranged and controlled, so PS4 is just not going to be significantly more expensive than Kinect-less XBone.

Sony is set for 2:1 or more sales advantage, and should be able to leverage that for better component discounts compared to MS.

Dropping Kinect would allow MS to match Sony for price, but MS really can't gain any advantage without losing hundreds of millions of $$$.