To support the current model that the videogame industry has, which is to end up selling millions of copies of games, a $500 price point is not viable.  It can come out at that, but not stay there.  Sure, you can do what the 3D0 and Neo-Geo did, or heck even the PS3 ($599), but you don't move enough consoles to justify the production  costs of over $50 million to get a game done (including all costs).  It just is not sustainable.

A think about people is they want a LOT of things.  That doesn't mean they will open up the wallet and pay for it.  This is PARTICULARLY true in this era of sluggish economic growth and most people looking at wages not keeping up with inflation.

No, I'm just saying $200 back then was worth a lot more than $200 today. :P

Minimum wage was $3.80 in 1990. It is $7.25 today. The relative value is still similar, but wages have increased. They will always have to increase as prices increase...

@1 we are clearly talking about a launch price point... PS2 was released @ 450 in here (Portugal) and @ 500 in the rest of europe, the rest is history. $500 is perfectly doable for a launch price...

@2 if they don't want to open the wallet, why do they voice so actively their desires? that is what bugs me.

ok, now you are putting your reasons in a way i do understand... you didn't do that before. yet need is subjective.
not that sony need defense, because they did nothing wrong, but BR players did cost more than that back in 2006. but you as a gamer, have the right to not want it. OK fair enough.

now... in regards of Xbox 720 and PS4, you still come up front saying that $400 is max, when all the features are unveil and all of the features that make the console price go over your $400 are "games" related and you for some reason can't see you live without them for the next generation, will you pay more?

i just find odd people talking about price of things they don't know how worth they are...

@bold - same here...

If we are talking the US, wages are pretty much flat or down since 1970 adjusting for inflation.

http://economix.blogs.nytimes.com/2012/10/22/the-uncomfortable-truth-about-american-wages/

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/31/wages-arent-stagnating-theyre-plummeting/

A recent NextBox rumor says that it will cost $500.  A number of people with Sony signatures said that will kill the new XBox.  I found that funny because I expect the PS4 to also cost $500.  $450 at the least.  But this discussion isn't really about whether these systems will cost $500.  This is about whether $500 is too much for these sytems.  So what do you think, is $500 to much?

Although that's misleading.   US wages are pretty much flat  (on average but no in practice) since the 1970's since raises since then have been based on things like better healthcare, dental and stock options.

US wages may be down... but total compensation?

So theoretecially you could be spending 500 on a videogame console because you don't have to sock away as much for retirement, have stocks of don't have to pay for healthcare.

However, additioanlly wages have gone up more then suggested, it's just hidden by the fact that a lot of mid level union work has disapeared due to globalization and been replaced with low paying service work.   Your average worker is actually keeping up with inflation fine, just so long as they don't lose their job.    So I guess that'd suggest a $500 console could have  a strong start, but would struggle to find long term userbase.

Then again, the brokest dudes i know seem to be the ones who own multiple game systems.