Why would the market be okay with $599?

I think you're maybe underselling the life-span of these batteries. Taken at it's most literal, a couple means 2, and after 14 years of using rechargeable controllers and 18 years for portable systems, I have never had a single one become noticeably compromised in 2 years. Having said that, the controllers usually need to be replaced after roughly 4 years for other reasons, so that is roughly, my battery ceiling for controllers. But again, the battery never showed signs of needing replacement after heavy use. That's across 2 full gens with no hint of battery degradation. I'll even toss in my grand champion of battery life, my launch Vita. I abandoned it in Dec 2018. Almost 7 years, and roughly 4-5 thousand hours, it still held a charge almost perfectly. The DS and DS Lite didn't get quite as much time, but they still never faltered. Furthermore to this, LI batteries are fairly easily replaceable.

And on a personal note. F*** "replaceable batteries". That's some 80's sh**.

To be honest it will be deadly if they charge 599 and then series x undercuts by 100 dollars. Why pay more for a lower spec machine.

Japan will be crying.

The only issue I had with rechargeable batteries are the battery packs for 360 and Wii controllers that wouldn't charge anymore after 5+ years. All the build in stuff has outlasted the controllers lifespan. My psp battery bloated and burst out of the case after not using it for a decade. It still works on power, battery is too big to fit and likely dead. But you can easily replace it.

My wife's iPod recently died, battery won't charge anymore, it made it 15 years.

Jesus Christ, I should charge my Vitas. A friend recently told me to do as much, because according to him ( and he's a smart guy I trust implicitly ), not charging LI batteries for extended periods of time accelerates degradation. I sure as hell don't need any burst-level events. 

With Jim Ryan making it super clear they are focusing on value, to me this means the physical edition definitely won't be $399 unless he's trying to keep that a huge surprise. Which I can only then logically assume $499 or $549 at the absolute most, considering these are the only two SKU's as far as we know. As for the digital edition, it's really tough to say depending on whether SNY wants to be greedy, or wants to look generous so they can lock down as many players to their online ecosystem and store as possible. Would SNY just double the SSD on the digital edition and charge $499 for both and consider that a value strategy?

$549 for the physical and $499 for the digital, worst case scenario. If they hit $599 again it's going to get some backlash, and they know what that did on a small social scale with PS3, and a much bigger social scale with XB1. The only way I see them getting away with $599, would be if XBSX is also $599 and no Lockhart. Then SNY can get away with it for the most part, even though their sales will still suffer early on.

I also think the PS5 aesthetic design is going to appeal way more so to kids than to adults, especially with the revealed two tone that sounds to be the only launch color. $599 for little Billy is going to be a much tougher sell than to a young adult or grown up who's interested for themselves. A PS4 or Pro will be much, much cheaper.

Honestly I missed the article about the PS5 BOM, if that's accurate maybe we could be looking more at $499 for the digital only edition and $549 for the phisical version. 

Though the BOM doesn't consider production, delivery and intermediation costs, for $499 they would still be taking a loss, maybe even for 549$ they would barely brake even. 

About PS3, the BD wasn't much of an advantage...console players didn't really care about it. Also, as mentioned before PS3 actually started in a far worse position, launching 1 year late with a weak lineup while the X360 already had an impressive library.

But most importantly, Sony at the time didn't have the brand reputation it has today in terms of 1st party content. 1st party reputation is their most important differentiation factor VS the XB. It's true that MS has invested a lot opening new studios... but it in any case it will take them some time to build that kind of reputation. 

Because of the limited production.

It's a simplistic way to say there would be enough demand @599$ to guarantee a decent launch.

There is an increasing demand for high-end hardware for gaming, if you a have doubts about it just look at Nvidia's results. Their consumer GPU segment is growing significantly in the last few years despite their raise in GPU prices. 

https://dashboards.trefis.com/no-login-required/5NF90qn6/Nvidia-Revenue-How-Does-Nvidia-Make-Money-?fromforbesandarticle=trefis200225

Of course, must potential customers won't be willing to spend that much. That's why price cuts and bundling would take place afterwards.