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If Microsoft can get away with launching a less $500 console with a good chunk of that price going towards a useless camera with a ton of backlash after the reveal and still sell a lot of units, Sony should be just fine at $500 provided they don't have an even worse PR disaster. If they put all of that cost towards raw power and have a lot of games to show for it, the console will do well.  $500 in 2018 is not $600 in 2006.

Seriously, the launch Xbox One was such a huge ripoff that I'm still amazed they pulled off 2nd place.