$500 is too expensive. If PS5 releases at that price (or higher), then it is going to get spanked again. With Google coming in and Switch already selling well, the competition looks even tougher this time around than it did in generation 7. And...I hate to say this...but we are kind of due for a recession. The business cycle is called a "cycle" for a reason. I hope it is not a big one like the 2008 one, but it could be.
There are lots of factors against a $500 console. From what I can tell Sony is going to try the same thing again as generation 7 and expect different results.