Their problems will not be solved with $299€ price point or smaller box. If they lower the price, PS4 will go to $349 and will still be viewed as more desirable console [as it already is today even though it is more expensive]. Xbone is often 100€ cheaper than PS4 in continental Europe, and customers don't care.
Looking at this stage, the only places where MS has a chance of reaching PS4 is US and UK. They can brute force their presence there because of past successes and willingness to throw a lot of money on those markets. The rest of the world is lost, not in the sense that they will be driven out of business, but just their sales will never come close to PS4.
As for future "wildcards"... MS has Win10 integration [apps+streaming to the desktop], and Sony has Morpheus. I somehow think that VR has better chance of finding mass market appeal, especially since Sony is successfully promoting PS4 as a gaming-first console.