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freebs2 on 13 June 2020
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Bonzinga said:
freebs2 said:

It's a simplistic way to say there would be enough demand @599$ to guarantee a decent launch.

There is an increasing demand for high-end hardware for gaming, if you a have doubts about it just look at Nvidia's results. Their consumer GPU segment is growing significantly in the last few years despite their raise in GPU prices. 

https://dashboards.trefis.com/no-login-required/5NF90qn6/Nvidia-Revenue-How-Does-Nvidia-Make-Money-?fromforbesandarticle=trefis200225

Of course, must potential customers won't be willing to spend that much. That's why price cuts and bundling would take place afterwards. 

Overpricing isn't the best way to win people over if your competition offers better value. Forcing gamers to pay more than they believe they should is exactly why many will turn there head in the other direction facing the alternative options. Remember the PS3 vs the 360? Remember the PS2 vs the Dream Cast? remember the XB1 vs the PS4? Do you need a PS5 vs the XSX? Doesn't matter how good the games might be, the pricing is extremely important. Because if any company thinks majority will jump on board there product regardless of price balancing is surely to lose a lot of momentum and reputation. I don't believe Sony will overprice there console, I believe we are looking at a slightly more expensive PS5 compared to the PS4 and I feel the XSX will match it.

You used correctly the term "value". It's the overall value proposition that determines how much a customer is willing to pay for a product and hardware specs are just a part of it.

Software is a key driver of value proposition and Sony showed they can offer both established popular series and new IPs from renowned studios that won't be avaliable anywere else. MS on the other hand has yet to demonstrate they can offer a comparable output of exclusive content both in terms of quantity and variety. That's why at the current status Sony's proposition has an advantage despite comparable specs.

Looking at past examples, if specs were the only key driver of value, Nintendo would have left the business a decade ago.