People argue Sony can and should recoup deficit of 600$ console that costs 500$ by PS Plus and online, but I think Sony had different plan in their mind.
I think they wanted to recoup deficit of console with ~$420 BOM while selling it for $399. Same strat as PS4 one, but selling it at a higher loss yet still maintaing fantastic price/performance ratio. Unbeatable one actually. It would have BC with PS4/Pro, it would be extremely good deal for a money and while they would lose a bit on each console sold, they would have recoup it back pretty much instantly while making sure most customers get on board ASAP.
What could have happened, if we assume Bloomberg report is correct, is that original BOM went a higher then expected and put them in weird spot.
If they sell for $399 they lose too much per console, if they sell it for $499 they lose price/perf advantage they would have held at $399. That way they dont lose money, but go head to head with competitor that always shot at higher BOM and price, thus higher specs.
If we look into rumored PS5, apart from chip itself, its all therebouts with XSX. So they really could have gone with smaller and cheaper chip but matching XSX everywhere else. If MS went with 20GB of GDDR6, I doubt 16GB of GDDR6 (highest speed modules at that) with 4GB of DDR4 would be considerably cheaper option.
If they wanted to save money, they must have looked at chip itself and figured out that at 7nm they save save substantial amount of money by going with 320-330mm² chip instead of 400mm² one.
We dont know, but IMO everything points to that direction.
I always said $399 PS5, even with 9.2TF Navi, is very tall order and that by selling it at that price Sony would position them in prefect spot. Think PS4 Pro vs XBX only without pretty much every advantage Scorpio has over Pro and few actual advantages PS5 would hold while being $100 dollars cheaper.
Therefore my theory is :
Sony aimed at ~$420 BOM (compared to $380 for PS4) while selling it at amazing price of $399, thus loosing ~60-70$ per console.
If price spikes, which Sony DID allude to, have happened, then they will be looking additional deficit on every console sold and that is not a great prospect for shareholders since early strat with lower BOM was still very agressive. Thus, Sony will be waiting on MS to see how they should price their console.
MS probably always aimed for $499 and higher BOM, but NOT much higher where they would be hurt on price if spike was to happen. Basically, XSX would cost 100$ more while original BOM was ~40$ more, thus even with spike their strat was not as price agressive for them to care.