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Nu-13 said:

If the number is correct, the only decision is wheter they will profit at $499 or take a small loss at $449. Either way I think MS will match whatever price sony chooses.

They'd take a $100ish loss selling at $499. 

They'll have to get that to the retailer around $425-$450, and to get it there it has to be manufactured and shipped.  It also has to be backed up by a marketing budget, otherwise few will sell.  So, I'd add at least $100 to the BoM to get their actual cost per unit.