"He then said that one factor Sony can't control is the "price level" of the next-gen console space. Totoki implies that Sony is waiting to see what the price of the Xbox Series X will be before putting a price on the PS5, so as to be competitive.

"What is not very clear or visible is because we are competing in the space, so it’s very difficult to discuss anything about the price at this point of time, and depending upon the price level, we may have to determine the promotion that we are going to deploy and how much costs we are prepared to pay."

I am not sure if this can be a hint, but i can say that if he said "we are competing in space"  it's mean on the same market space with  Xbox. Then it can be said that we are competing on the same market and target the same audience . Probably the author of the article just made some assumption but i can see the relation. Well judging by micro economy rule of thumb, a product price can be determined based on cost and competitor.  So that's that i guess.  

You know the PS3 launched a year after the 360?

If changing prices is ad hoc easy, why didn't Microsoft come out after Sony announced PS4 price and say something similar to: "Did we say 499? Of course what we wanted to say is 299."

So, no, Sony is not waiting for MS to come out first.

You are correct. But i can see Xbox price will also affecting directly to PS5 price or vice versa . But indeed it also can be affected by manything (old hardware, service, market situation, etc ) and competitor is just one  part of it.  

And Microsoft said not so long ago that they would price their next gen system according to the competition cause they don't want to repeat the same mistake they did back in 2013.

So it seems that both companies are waiting for the other one to announce their price tag so what will happen? One is going to have to announce a price sooner or later, but which? This could be interesting.

Nothing but assumptions. PlayStation is the market leader its up to them to set the standard and price. Plus theres a set price range that the hardware would allow. If they want to make a profit take a loss go even will be marginal difference. On the current era with the likes of digital foundry and many others a price to high or low would be blasted by reviews.

The prisoner's dilemma again. I'm thinking, assuming the rumored specs are correct, that Sony will settle for $449 with moderate losses and Microsoft for $499 with large losses. Ideally for both companies prices would be higher respectively, but they know the risks of being undercut by the competition.

Or maybe if a Series S console exists, Microsoft could be really confident of their two-pronged strategy and will price the Series X at $599, with Sony taking the $499 spot. Investors looking at quarterly statements will be happier, but our wallets won't I suppose.

Considering it cost $381 to manufacture, a $399 sounds like it was likely to happen anyway.

I hope PS5 is $400

prepare yourself for the most epic undercut.

Rumors are that while MS will have the GPU TF benefit, Sony's console will have a faster and larger SSD and faster RAM. How that will work out exactly, I'm not sure, but raw TF numbers are becoming less significant.
I'm expecting that MS Series X will be mildly more expensive than PS5, while MS Series S (or whatever the cheap option will be called) will be mildly cheaper. MS seems rather conservative by not wanting to break compatibility with even the launch X1, while Sony seems to be a bit more daring by not guaranteeing that next gen games will be playable on PS4 models.