It seems too much for the situacion of Europe for example...

$399 would be very very nice and since i'm usually estimating too low it'll probably be $499 at launch.
That's too much for me, it'll mean a €449/€499 in europe too.

And don't compare gaming consoles to phones, tablets or motorized vehicles if you will.

It was 20,000 belgian francs which translates to €500, I'm sure in german marks and dutch guldens it was also around €500. The euro didn't exist then but since you live in the UK you never were aware that stores had Euro prices long before the euro was officially introduced.

I remember the launch too, I was in France at the time. Thought the prizes were waaaaaayyy too steep. And they were. A very strong pound at the time though. But the prices at launch... ouch. They can't afford something like that again, certainly not with the current market and competitors.

how many people are actually productive with their phone or tablet?  I'm tired of this discussion when people don't NEED to browse the web on a tablet and they certainly don't NEED to play angry birds on their phones that they pay hundreds of dollars for.  I'm sorry but this is just not a valid counter point.  People usually get about as much "work" done on their tablet or phone as they do on a gaming console, especially the younger demographic.

No!! $399 at the most

But it just doesn't work that way. Yet. The younger demographic is mostly depended on the willingness of the older demographic to pay their consoles btw. A phone nowadays is a basic need so that comparison we can skip i guess?. A tablet, may be cheaper to produce, also has more easy to access features we daily use. Checking and writing mail on a console vs tablet? Besides, the tablet is often used by the entire family, the console not so much. They made some big steps though, with streaming and blu-ray and the likes but in all, a tablet just seems much more worth to a household.

Unfortunately, tablets will own home consoles in graphics, because tablet players like to pay $600-$1000 just to play angry birds while console gamers want cheap products but at the same time, they want that those cheap consoles can run beautiful graphics without being too much far from gaming PCs.

Huh? Maybe it's an issue with my grammar. At 499/599, they were taking a 200$+ loss on each system. 

This loss was due to Blu-ray driver that cost over $200 in 2006, but now we have much cheaper and faster BD drives costing less than $50, so Sony-MS can launch a $500-$600 console without any loss this time.