I see zero chance that MS releases a $500 Xbox, unless they have more than one SKU.  In that case, there might be something at $500, if there's another one cheaper. They just saw how that $500 price tag affected sales at the beginning of this generation. inflation, at least in the dollar, has been relatively low. So that $500 is still $500. If they make that same mistake again, that would be one of the stupidest moves in the history of business.

Similarly, I see zero chance that they really say less powerful console than Sony, unless they truly are caught off guard. That's another mistake they just made, and certainly will have learned from. they have extremely deep pockets, and have  shown lately that they are willing to spend and do intend to be a player in the gaming space. If anything, I expect them to be willing to take a hefty loss on console sales if necessary, in order to stay ahead of Sony in the next generation. Microsoft has a lot more ability to sustain losses for a long time if necessary, if they have a long-term goal in mind.  It looks to me that they are pulling out all the stops to compete.

Actually I don't see any of the two releasing for 400 next gen. The high prices of mid-gen consoles alone make that kind of unlikely. As Amy has already said, considering both consoles will be backwards compatible, I see both releasing at 500 price point and still selling at a loss, considering the prices of the new components in comparison to the mid gen components. 

Considering the power...both consoles will be able to do 4K/30 easily, even 4K/60 for some games....I don't see how a power difference would greatly benefit anyone of the two unless it's a drastic difference. Most people will even still be on 1080p TV's next gen. A few TF more or less are not going to make much of a difference.Iii 

I disagree that Wii had anything to do with PS3's sales either. That was entirely down to the pricetag, hardware and the Xbox 360.

Also why is PS5 in direct competition if PS4 is not? What is going to make the PS5 appeal to the same people as the Switch, while the PS4 appeals to a different group. I very much doubt the PS5 is going to be different from the PS4 in any major way, it's just going to be the same thing with more power.

Switch is not going to eat into PS5 sales, just as it hasn't eaten into PS4 sales.

A very similar situation happened with the SNES and PS1.  The SNES outsold the PS1, when it was first released.  Here let's take what you just said and see if it applies to the SNES, PS1 and N64.

"Also why is the N64 in direct competition (with PS1) if the SNES is not?  What is going to make the N64 appeal to the same people as the PS1, while the SNES appeals to a different group.  I very much doubt the N64 is going to be different from the SNES in any major way, it's just going to be the same thing with more power.

PS1 is not going to eat into N64 sales, just as it hasn't eaten into SNES sales."

I'm sorry but what are you talking about ? SNES sold 49.10M. PS1 sold 104.25M.

Perhaps there is joke or a metaphor somewhere I didn't get since english isn't my first language.

Nope.

6 months gap can't make any meaningful difference in possible specs.

Another way to look at it, whatever sony anounces whenever they announce it has been in the oven for years before that point. And we know they are both going with AMD. The only way one comes out being as much as 25% or more powerful than the other is if they wait for aother 2 or 3 years, or mke a console that cost significantly more. 

So sny going from a mtch to november lunch in the same year cant possibly mean that we get a more feature packed console. It wll be the same thing.

My thinking based on the rumor, is tease PS5 before e3, and see if you can force MS to make a move or spill the beans at E3 like they did before, then hold a massive 25th anniversary PSX PS5 reveal event to be remembered. Whether it launches soon after, or early 2020, doesn't really matter, as long as the price is right. A $399-$499 PS5 shouldn't hinder a $199 PS4 much at all.