What do you guys think?

IMO I think it might be closer, but I still believe Sony will come out on top at the end cause of their exclusives and they already have all the momentum from PS4. Plus Sony is far more dominant in Europe and other regions worldwide. 

It will help in markets that are already competitive, but markets where Sony dominates it won't do much.

Worldwide? No
In North America, South America, the UK, and AU/NZ? There is a chance Xbox can be competitive with the Series S.
But Microsoft needs the games. Most of their big hitters are coming in 2022/2023 and Halo is delayed so they really nee dot work that out.

$300 4TF watered-down version of the XSX vs $400 10.3TF version of the PS5 with the only difference being a disc drive?

I said this before this reveal, that the XSS would be in the $300 - $350 range and would likely be all digital, and even then, I said the only thing sony needs to worry about is not having a $399 console.

The XB1 has been at a lower price than the PS4 (albeit unofficially) all of this generation and that didn't stop the PS4 from outselling it. A $100 difference is not going to suddenly make someone that wants a PS5 to go and get an XSS instead. Especially when for that $100 more with the PS5AD, you get a larger SSD and almost 2.5x the power.

I also said this before, the last thing S would want, is a $399 10TF PS5 that falls in the middle of their $299 4TF offering and their 12TF $499 offering. The XSS existing at $299 actually makes a $399 appear to have the better value and a $499 XSX be too expensive.

If however the cheapest PS5 you can buy costs $449/$499 (which as I also said before would be dumb on sony's part if there is a $299 XSS on the market), then you can kiss all this goodbye and then in that case you would have a decent fight on your hands in some territories.

MS's announcement of a $300 XBOX, with an option for payments, allows them a chance to actually compete period. It will not change the overall battle field though. SONY does not need to do anything. They will do nothing. Matter of fact SONY should absolutely position PS5 as luxury console in opposition to MS, who at this point, is outright admitting that they are un confident about their brand. That is what the battle is going to be about; Brand power.

Then we have to ask ourselves; how long until Series S is phased out and how will that affect those who bought it after? Are you trading longevity for a 100 bucks off?

EDIT: IF MS had a stronger brand this would be bigger. This was done because they don't.

I think Sony still wins by a good margin but it will be a closer generation. It does makes it more likely that I would buy an Xbox S a few years down the road during a black Friday sale.

Nope.

Exactly. The two things that sell consoles are brand and games. Its always that, and will always be that.

If the price was as important as some make it out to be, then the XB1 should have been outselling the PS5 since 2014.

That $299 XSS would make a mark, it shouldn't Xbox at least 5-10M more sales than they would have otherwise had. But its not enough to make a dent in the grand scheme of things.

In the Americas and Australia? Yes, it could match PS5 sales or even exceed them. In Japan? No way whatsoever. Unlikely to surpass PS5 in Europe either.

I think it has a really good chance. Imo there's a lot of people that don't want an expensive console to play next gen games. I think for those kinds of people that want to get the cheapest next gen console for their kids that want to play fortnite and call of duty, the $300 price point is a killer deal.

I doubt it will be enough to outsell the PS5 WW but I think the sales will be closer than the current gen.