1. You read my post wrong. The lowest future price points we were discussing concerned Series S vs PS5DE, not Series X vs PS5.

Series S has a storage capacity of 512 GB, that's less than what's inside the PS5DE (825 GB). By simply targeting Series S's storage (in size), Sony would reduce the cost gap which was already small at launch relative to the specs difference ($300 vs $400). Series S is more storage hungry/dependent, its game generally have the bigger file sizes (regardless of the reasons), and the proprietary expansion card is slower, much more expensive, and limited in options (2 options vs countless). There would be no harm in Sony releasing a cheaper PS5DE version with storage lower than 512 GB, because the flexible expansions are becoming dirt cheap, and it doesn't have GamePass games to worry about. If Xbox can go as low as 512 GB, so should PS5 with its decidedly superior storage system.

2. True 6nm or not, PS5's die size shrank, and as a result Sony (or the chip makers) can now produce noticeably more units than they used to. Series S has the theoretical production capacity to crush PS5's, but you can't sell what people don't want, so it's an insignificant long term advantage. The console is primarily demand capped as opposed to production capped. Whatever the reason, Sony's production targets are now reportedly sky high, while MS is still trying to convince people that Series S is the best deal in gaming instead of doing something about the X. Series X being "wafer hungry" so to speak due to its slower clockrate/wider design, and perhaps taking long to transition to "6nm", is translating to piss poor sales, especially if VGC's estimates are to be believed. PS5 is getting a revision soon (possibly 5nm), yet no word is out about Microsoft matching. They're clearly slower, and 2023 will confirm it. MS was reported to transition to the "pseudo" 6nm as well, but it's taking them longer supposedly because they're a lower priority to TSMC:

https://www.angstronomics.com/p/ps5-refresh-oberon-plus

For a while, it was reported that Microsoft paid for chip priority. During that period, Xbox Series managed to score a few wins and generally fought back. Why do you think that happened/stopped? If it's just a matter of TSMC favoring the highest bidder, then why didn't MS continue to pay them extra? Do platform popularity and demand perceptions influence TSMC and AMD's decisions to prioritize between Sony and Microsoft? Why isn't Microsoft getting as much wafer as Sony? I think it's obvious that Playstation's popularity gives Sony an edge in being prioritized by chip makers by default, which automatically puts them in a comfortable position and enables them to strike better deals.

Microsoft did a short gen with the OG Xbox (one performance level), then a long gen with the 360 (one performance level, even though that generation was practically *crying* out for "pro" consoles!), and then a long gen with the Xbox One (technically three, but mainly two performance levels).  So I don't see any commonality from one generation to the next, so what would suggest they'll follow suit this gen with any of those three previous examples.  Especially because this cycle they've launched with two performance levels for the first time?

I'm familiar with "halo" and "image-maker" products, but they make more sense to me in the PC space where games have user-selectable quality levels, than on console where there's a tendency for developers offer limited end-user customization of the experience.  Because of this, even a "halo" product has to be expected to sell well enough to make developers want to bother optimizing for it.

From the big Series S interview on Eurogamer:

"To put that into perspective, Xbox 360 launched with individual CPU and GPUs, both fabricated at 90nm. By the generation's end, those two components had been combined into a single chip, delivering a significant cost reduction in its own right, and they were also delivered using a much smaller process (possibly as low as 32nm on the final model). Between launch and the end of the 360's lifecycle, the machine had actually transitioned through several fabrication nodes. Its successor - Xbox One - saw its processor revised just once, down from 28nm to 16nm FinFET. Cost reduction opportunities were thin on the ground for this generation and will be even more constricted going forward.

"Moore's Law is certainly not dead! Moore's Law is continuing and we have a good path to 5nm and 3nm, and those are going to bring improved performance and good power," enthuses Goossen. "What they're not bringing any more is a good cost reduction cost per transistor - and so this has foundational impacts to console development, because now we'll get cost reductions, but they're slowing down and it won't be nearly the magnitudes that we've seen before"."

So Microsoft is predicting that cost reductions per transistor from new processes will be smaller than what we saw with the Xbox One, which itself was smaller than what we saw with the Xbox 360.  That's the point.  So those that saw we'll see dramatic price reductions in consoles this gen may not have their expectations met.

It's not that there will be no cost reductions, it's just that they're reportedly anticipated to become comparatively meagre over time.  For example, Microsoft said of the 360:

"Series S has been very impactful for us. As we design our new consoles for the new generation, we're very much looking forward through the generation to be thinking ahead - like, how does this work? - and that's why we got to two consoles at the same time," Goossen continued. "We are facing a big change in how consoles are designed. I believe when we first started building the original Xbox 360 - the smallest one without the HDD - that cost us about $460. By the end of the generation it cost us around $120 - and that cost reduction path was driven principally by silicon cost reduction."

We didn't see anything that major last gen, and they're predicting even less this gen.

Except Sony is managing two supply chains, one for PS5 and one for PS4.

Microsoft ended its Xbox One supply chain as it began the two for the Xbox Series consoles.

I grant you on the engineering front, but not on the supply chain front.

There's normally pressure, late in a generation, on the huge delta between console and PC performance.  It's likely that some gamers drift towards consoles early in a generation, and then drift back to PC one-by-one, as the performance gap grows.  The "pro" consoles reduced that delta, so likely stemmed that flow last gen.  And that reduced pressure to launch the new generation in, say, 2018 or 2019 (vs. 2020).  Generations can and do last longer than that, but the longer the generation goes on the worse the gap goes.  Look at how bad PS360 games were vs. PCs in 2012 and 2013!

An interesting video from Digital Foundry comparing a last-gen PC graphics card (the 3060) against its current-gen replacement (the 4060). What stood out for me about this video was that even though the older card had 50% more RAM (12 GB vs. only 8 GB on the new ones), that the new card nonetheless offered better overall performance in a lot of situations due to the more efficient architecture. And the new card drew less wattage per frame generated (meaning the older card not only needed more RAM, but it needed more watts to get the same FPS). If the new card had the same amount of RAM, it would have been absolutely no contest at all.

This architectural advantage winning out over more frame-buffer RAM is a big part of why moving to a new architecture would probably pay more dividends than a suped-up "Pro" console where they're increasing the clocks, the compute units, or the RAM of the old system. Same as how the Series S was smaller and less expensive to manufacture than the One X, despite the Series S being more capable overall.

Here's the video here for reference: https://www.youtube.com/watch?v=BQ3u5bWMf_M