If Sony or Microsoft have their next console retailing for over 400 pounds/dollars then they're going to be doomed to failure.

The post was already addressed, I just wanted to point out this huge misconception some people might have. Affordable =/= value perceived by the customer. Back then Sony got severely burned because of this misconception that occupied minds of high ranked management of SCE (you must remember "two jobs" quote). 6 (or 7 by the time of the release) years later it got worse, less money to waste in customer's wallet... and here we go again. God, I hope Sony learned the lesson, because some of it's fans surely didn't.

I would LOVE a $600 system from Sony. This time built around a $600 price. I want a do it all and then some system. Look at the Vita, its $250, people were screaming "its gonna be 499 say goodbye to sony ha ha " and then we got a inexpensive Vita that doesn't really stand out...i wish they would have made a 499 Vita that would have and still would be dropping every ones jaws.

Let the other guys make the boring well priced systems. If Sony tries to just make a system that fits in MS and Nintendo will wipe the floor with them,.

$599 PS4 Do it all system 1TB HDD (PS3 BC)
$399 PS4 Do half of it System 500GB No ps3 BC
$150 Stream PS3 and PS4 games, Play blu ray and 4k movies system. Plus subscription.

Even on the graphical end, I think they can do plenty within the context of a $400 system. Not only will the current gen consoles be 7-8 years old by this time next year, both were hobbled by external factors as well--i.e. the 360 being rushed because they couldn't make Xboxes anymore, the complications of the Cell in the PS3, and so forth. Memory is cheaper now, and both the CPUs and GPUs available are more power and energy efficient, so I'm sure they can make far better hardware without going wild on price.

Frankly, for all the complaints about how underpowered the Wii U is, that it can run current gen games well enough when the Gamepad eats up half the $300 cost is proof that an overly expensive console would be pointless for MS and Sony at this point. The difference between a $400 system in 2013 and current gen hardware will be far bigger than the difference between $400 and $500 in today's tech.

It's a fine price for launch.

I just need more power.

May I ask your age and how much of your wages go toward bills and the cost of living every month? You're trying to make yourself Johnny Everyman, but you're speaking from a personal perspective. If most people could easily afford a $500 console, then the PS3 wouldn't have had it's issues for the first two or three years, and you never would have made this thread in the first place.

At 26 years old, I'm paying for (half of) an apartment + electric + water, two student loans, a phone bill, car insurance, gasoline, groceries, the tab on dining out at least once a week, and tithe to my church. Oh yeah, I just bought a car and laptop, so I must add a couple more monthly payments to the list. When I was part time, it would have taken me more than half a year to save up enough for a $500 console + one game. And that's assuming nothing else in life gets in the way, like it so often does. Do you think the average person in that position would take 6-10 months to save up for one console when there are cheaper alternatives to entertainment?

Also keep in mind that I don't have a wife or kids to worry about, but many do. Throw them in the mix and a $500 console would be a complete no-no for many, even at full-time employment. All of a sudden, that $350 more family-friendly Wii U looks a bit more attractive.

You've seen the "average" consumer spend more than $500, but on what though? Like others have said in this thread, people are a lot quicker to spend on tablets, laptops and phones because they are actually conducive to being productive and are at the core of our everyday lives. They are largely now seen as things we can't live without, whereas video games always have been and still are seen as high-priced hobbyist toys. When my old laptop went out, I went and got a new one that same day, because I couldn't imagine my life without one. If my video game consoles all die suddenly, I'll be cool for a while.

Oh, and the economy was fine in 2006. It wasn't until mid-2007 that things started getting bad, and late 2007 or early 2008 where things fell off a cliff and really opened people's eyes. A $500 console is expensive no matter how you spin it.

The Cell CPU was also a very expensive component:

http://www.engadget.com/2006/02/18/playstation-3-costs-900-sez-merrill-lynch-mob/

I think a forum like this is not representative of the average gamer. Gamers on here are hardcore gamers and many of them would pay $500-600, millions of people wouldn't.

"The 17-nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent, the commission said today. It cut the forecast for Germany, Europe’s largest economy, to 0.8 percent from 1.7 percent."

http://www.bloomberg.com/news/2012-11-07/eu-cuts-2013-growth-forecast-as-crisis-weighs-on-germany.html

I asked some of my friends who I consider casual console gamers (I.e., they only play sports games and COD) and they said they aren't buying a new NeXtbox or PS4 at launch, going to wait 2-3 years and just buying COD/sports games on 360/PS3, even if the graphics are way worse. I wouldn't be surprised if many people don't even want new consoles in 2013 and would rather purchase more games on their existing consoles than buy a next generation console without hundreds of games. There are a lot of games coming out in 2013 for PS3/360. This means that not only do gamers need to save up $300-500 for a new console with questionable # of "Killer apps" and launch games, but they'd need to save up $X to buy all the games they want to play in 2013 on their existing consoles. I bet if MS and Sony actually extended the life of 360 / PS3 by 3-4 years a lot of gamers wouldn't mind. For that reason, to entice people to upgrade from their existing consoles, the price of entry has to be reasonable or the technology has to be revolutionary in some way that's not just fancy graphics.

IMO, it makes a lot of sense to launch a low-end Sony SKU at $299-349 and have that version come with no mechanical hard drive whatsoever. Actually what Nintendo did on that front is very smart. A lot of us have external mechanical storage or an SSD laying around. Personally I don't want to pay for a 500GB-1TB hard drive at MS or Sony prices when I can buy it myself for much cheaper on Newegg or Amazon / or simply use existing storage I already have for back up. Having a $299-349 PS4 with only minimum flash storage (32GB) would be a great way to save costs.

Also, if PS4 is $499 and Nintendo drops the price of the Wii U to $249 by Fall 2013, Sony is going to be in a lot of trouble. You'd be able to buy 4-5 games with the Wii U for the price of a single PS4. That's how PS3 had one of the worst starts in the history of console gaming. That's not even bringing up the price of Xbox 720 which could end up $299-399 as that proved very successful for MS this round. If Sony ends up with the most expensive console again, they will fail most likely. The "superior" hardware in PS3 like the Cell did little to make it better than Xbox 360 graphically for most games.

Even if hypothetically Sony has 50% more powerful hardware than Xbox 720, developers won't take advantage of this for 2-3 years and most gamers would be hard-pressed to tell the difference between Xbox 720 and PS4 graphics, but if PS4 costs a lot more, they wouldn't understand where the price premium is coming from because "untapped potential" is not a selling point when one has to pay $100 more in hopes it would be tapped at some point. 

399e to 449e tops

(yes that's e for euros)

No. Just no.

These thread is following the usual VGChartz pattern. Sony's staunchest supporters want them to follow a strategy that will lead them to financial ruin.