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RolStoppable said:
PS5 and XSX will cost the same and neither one will be cheaper than $499, because that's the reason why both companies run a two SKU strategy.

Yep. I expect $499 for the PS5 and $499 for the Series X. I reckon PS5 Digital will be $399 and Series S will be $350.

No need for either to undercut each other in the full fat end of the market. I think all console SKU's will follow the loss leader model to some degree but this will probably be most true of the PS5 Digital given that consumers will always have to get digital games with juiciest commission for Sony. Game Pass also has a role to play strategically, since that service scales to be profitable only with a large install base. Its for these reasons that most (if not all) price competition will be (surprise surprise) at the cheaper end of the market.