By the time E3 2014 rolled around earlier this month, the original $499 price point for the Xbox One was already ancient history. Still, sitting down with Sony Head of Worldwide Studios America Scott Rohde at the show, I couldn't help asking how he felt when he first heard that the PlayStation 4 was going to launch $100 cheaper than its nearest competition.

"I'm not gonna lie. I remember exactly where I was," Rohde told Ars. "We were in press conference rehearsals last year. We had a feeling they were going to come in at $499, but we weren't sure. So yeah, we were dancing in the aisles and high-fiving. It was great. Anyone that came in on an interview, it didn't matter what the question was, I could always just answer it with $399. It was the answer to every question."

The process to get to that moment started way back in 2008, when Sony started work on the PS4 hardware design with a $399 price point firmly in its sights, Rohde said, echoing similar sentiments from Sony Worldwide Studios President Shuhei Yoshida. The focus on the lower price point was the result of hard-earned lessons from the previous hardware generation, he said.

"We thought we could overcome Microsoft in the previous generation because the first Xbox didn't have that great market penetration, and PlayStation 2 was so dominant in that era. We wanted a machine in PlayStation 3 that was amazing, that could do everything, and completely misjudged how much the market could bear in terms of price point. Also, coming out a year late, it took us some catch up to get where we needed to be. But we're proud of where PS3 ended up and how it's still going strong today."

And now that Microsoft has ditched the forced pack-in of the Kinect to be more price competitive with the PS4? Rohde's reaction was more muted. "I think that, to be truthful, we always assumed that eventually they'd have to release a SKU without a camera," he said. "So we were waiting for it to a degree, and we were ready for it."

Full article talks about steam machines as well - http://arstechnica.com/gaming/2014/06/sony-we-were-dancing-in-the-aisles-when-microsoft-announced-499-xbox-one/

Lesson learned from the high price of the PS3 then! It appears Sony are prepared to complete with the MS and a kinectless X1. Wonder if a price drop for the PS4 is going to come into the equation sooner rather than later now due the to X1's price point?  

I don't think the ps4's price is gonna go down anytime soon... If MS had the original price of the x1 as $399, I think there would be more competition between the x1 and the ps4 but until the x1's price is $350 or lower, I don't think Sony has to worry about a thing since most games on the ps4 still look better

Compared to the ps3... The $399 price tag is an amazing move for Sony without a doubt and as each week goes by, it more and more confirms that the ps4 will most likely win this generation

I guess they were dancing for some time when they heard about the other stuff before the 180.

PS4 should keep the same price but add the camera.

Liars, I bet they changed the price after Microsoft announced the price of the Xbox One. Dirty cheaters.

Lol, cheaters, yep.

Yeah, cheaters. That's what they call to those people who don't play by the rules and Sony did that exactly.

You know thats extremely difficult if not impossible for a company in Sony's position.

So because they announced a lower price to the X1, they are cheating?

Yes, they changed their bussiness plan in accordance to Microsoft plans. That's dirty and unfair, and doesn't promote healthy competition.