In my opinion, $150 is the mass market price of a handheld gaming system and $300 is the mass market price of a home console; and the further above this price you get the more your system will struggle. In ways, charging $500 for a home console is similar to charging $250 for a handheld system and, while there is a small market and some people might be convinced to buy in at that price, no system will see particularly strong sales at this price point.


With that said, if Sony could turn a profit at $500 it might be good for Sony in the long run to sell their system for that price even if it translated to weaker sales overall. Sony bleeding money in the hope of returning to being the market leader is more likely to lead to the end of the Playstation than anything else because, as Sony is forced to restructure to keep the doors open, a division with gigantic losses is a huge target for a company that has as bad of finances as Sony currently does.

Most people don't pay nearly that much out of pocket for their smart-phones ...

Smart phones are such popular gadgets because people often get them for $200 or less when they sign up to contracts, and few people who own the $500+ smartphones paid full price for them. If a console manufacturer figured out a way to give an $1,000 console for free if people were willing to sign up for a 5 year cable television and high-speed internet contract the actual sales price of the console would be pretty meaningless; as it is for the $800 phones that are sold for less than $200 on a 3 year data+voice contract.

I don't know if anybody mentioned it or not but the NeXbox's rumored price is $499. They will have a subcri[tion model too though

Unless they offered something new (not move but something truly new) it'd be too high a price point. I know people who bought a PS3 for the bluray player alone. Without that behind them, it'd have to focus on the games once again. Whether they could get away with a $500 price point is purely to do now with the quality of the gaming to be found on the console. 

Sorry should have mentioned I was not talking about getting a plan with it. But like I said  you still pay more for a smart phone then a console.

http://www.ebay.com.au/sch/i.html?_trksid=p4712.m570.l1311&_nkw=iphone+5+unlocked&_sacat=0&_from=R40

SONY had a 100$ price cut in the PS3's first and a second year to stay competitive/relevant while the system started out at a 200$ loss. I doubt they've got the balls to launch at over 399 again.

I honestly don't think a subscription model will work for consoles, unless they bring a lot more things than just pure gaming and market it wisely.

My point was that $499 won't be a horrible price if both of them are.  Personally I believe that the subcription model will be huge but that is for another thread.  

^Monster is such a great show!

I think $499 is fine as long as it is powerful enough and comes complete with everything I need to use it (hdmi). Also it needs to appear to have a decent jump in graphics

You mean 599??