Yes, no matter the power, over 599 MS is doomed until prices don't get lower. There are around 170 milions consoles users in the world, if we don't consider people who still owns only PS3/360 or even Wii, and if we also don't consider Switch. Hardcore gamers VASTLY overestimate how big of a cut they are compared to this numbers, they are incredibly small. We are incredibly small. We are the only ones vaguely understanding what specs could actually do to games and how this relate with price. If two consoles are similars overall, the casual gamer wont understand the difference between the two, numbers wont do it, he just do not have the perspective of the numbers, he needs to see games. If games are equal to his eyes, there is no point in buying a more expensive console that maybe doesn't even have interesting exclusives just because a friend said "it's more powerful bro". Numbers without context and understanding aren't enough to convince folks to spend 100 dollars more.
Now, it doesn't come down to how much this consoles cost to produce and such, it depens by how much Sony and MS want to gain or lose on the prices. If Sony want to set 399, it can. If MS feels bold and want to do 599, it can. It will all comes down to the sacrifices they are ready to make in order to look the overall better package to the average consumer.