I think MS is in a tough position but i wont go too much into it

I want Ps4 to be $399 but i think it might actually launch at $429. The 720 will have the $299 subscription model with the $499 premium.

I dont think the 720 $299 subscription model will have any effect because the 360 $99 subscription model didnt really have a noticeable effect

M$ has their E3 conference before Sony, so M$ is announcing it first.

Sure they could. However, they are at a massive disadvantage.  It's that thing that often crushes small companies - cash flow.

Sony sold a large building (an assets) this year.  Something I doubt they really wanted to do.  Buildings can be great assets, and the longer you own them, usually the less you have to pay for them.  You rent them out, make money off your tenants and such.

Microsoft is as a huge advantage as they literally have billions of cash just sitting around – more than tens of billions – like more than 68 billion as of Jan 2013.  They can loan out money that they don’t have to borrow against because they can cover it in cash.

In strict business terms it will cost Sony much more to loan out the consoles to their customers – or pay the interest on the consoles while they get their revenue back over time.  They still have to pay for parts, workers, advertising, etc.  And to borrow money to pay that, while the customers are paying for a PS4 in installments will hurt their cash flow and bottom line. (Maybe that’s why they sold the building?)

Sony could do a down payment - joing PS+ model, similar to Microsoft - it just will not be as easy or as profitible for them.

Microsoft in May.

NextBox will have a subscription, $200-$250 straight with an extra $50 per month, including Xbox Live.
Alternatively, $400-$450 with no additional extras.

PS4 will have its price in June, a basic bundle for $400, and a more "deluxe" bundle for $500.