With Mark Cerny saying from launch that his first objective in the hardware team was to reduce the size of the PS4's considerably large APU, we can assume once these roll out the cost of manufacture will drop a fair amount (smaller die -> less silicon -> lower cost). Alongside te fact that thePS$ is running on x86 architecture any breakthroughs in the PC manufacure industry could be thought to have influence on the manufacture of the console. Since the days of the complex and expensive cell are gone we could expect to see the cost of compnenets within the PS4 drop like pc hard ware does year on year. The reprocussion of this being that Sony will begin making more on each PS4 sold than any other console generation before.
November NPD has really proven the power of pricing and to say the least the eyebrows of Sony execs must at be raised after the defeat of the PS4 by around 50% but will this be enough to cause a reaction from sony. As things stand it is evident Sony wants to maintain and increase profit margins, indicated by not matching the price this holiday as their competitor "grabbed some gasoline and set fire to millions of dollars to appease the gaming gods" - ( quote hilarious gamr whose name escapes me) But sony isn't so foolish as to forget that the competion is a marathon not a race so surely they must have some long term strategies as well such as taking a hit to profit now for greater pay off later. That in itself is the definition of the console market, being loss leaders.
Since we can establish its not a question of if but when, it becomes clear that timing is crucial. If we go by speculation that microsoft will drop their price back to $350 again but permanantly holiday 2015 then should sony do the same? Naturally they would want to undercut but with profit in mind do you think they will opt for value addtions, maybe a 1tb PS4 for $350. Or should they go a step further, maybe Shawn Layden can recreate Steve Race's 10 second PS2 e3 presentation "$299". While we saw the PS4 was out selling the XB1 even after kinect removal and XB1 having an arguably stronger line up for all of 2014, do you think a price parity $350 offer will be enough to maintain or extend PS4's lead considering the momentum XB1 is beginning to pick up. Little doubt in PS4 maintaining is WW lead but in the US price is king, should Sony undercut microsoft? Can they afford to take the hit? Will there be a respectable pay off for such a risky move?
