I fully expect them to drop the price by 100$, because I also expect live to go up to 99.

They will drop it to $399 fall 2014 before Halo drops.

Microsoft will make less money.

Except it isn't.  Right now with the information available, the GPU is 50% more powerful, but there is no current performance metric that has established that the PS4 is 50% more powerful than the Xbox One.  I'm not saying it isn't more powerful, nor am I saying how powerful it is, but there is no performance metric that states that it is 50% more powerful. 

The difference between the Xbox 360's GPU and the PS3's GPU wasn't that the Xbox 360's was 50% more powerful, but rather that the Xbox 360's had features that the PS3's didn't.  At first blush, as many did, they assumed the PS3's GPU was better than the Xbox 360's, but in reality that proved to be false.  Not saying that is necessarily the case this generation, but performance specs don't always mean that much.  I mean, you are talking nanoseconds for a performance increase, not seconds or minutes.  And in all honesty, it's only a performance increase if a developer uses those extra shaders to do the same work as what's being done on the Xbox 360.  If they don't.  If they offer greater fidelity for the Sony console, or use the same number of shaders on both, than there won't be a substantial performance increase.  Though, as suggested, you might see a better image on the PS4.

Shaders aren't necessarily about performance, they're more about fidelity.  If I increase the fidelity of the image the GPU is doing more work, not working more efficiently.  If I spread the same work the Xbox One does over more shaders, than I'm gaining performance but I likely won't gain fidelity.

TBH I think there will be more sales in the short run, same sales in the long run. As time goes on the gap between XB1 and PS4 prices will shrink to the point that they are no more than $50 apart at that point people will just buy what they did last time or what their frineds did.

Either way, its irrelevant.

They would do quite well.

What happens if Microsoft jumps out of bed with NSA and assorted government spooks?

What happens if the spooks actually agree to subsidize the Xbone and Microsoft sells if for $200 with a mandatory enhanced Kinect that not only measures your heatbeat any time you're near it but keeps track of all your conversations, moods, friends, friends of friends... and so forth?

I might have to pick one up at launch if they did that.

Would be suicide for the CoD crowd and Halo crowd. 

Will be interesting if they do cut early and try to make it back with an upped Live sub.

These console launches are the most aggressive I have ever known actually PRIOR to the launch, its getting ridiculous.

Can we wait to see the consoles actually out and working and reviewed to make our minds up.

If you really want a view now: My opinion of the answer to your question at this point in time is that based on the fact that the PS4 is smaller, considerably more power and more cheaper and doesnt include a camera that can spy on you is that MS will need to drop the xbone much more than $100 and even then I wouldnt buy it.