Even at 399 consumers will reject x1 in favor of PS4 due to the fact that at this time there is little to differentiate either console other than PS4 is significantly more powerful than X1
MS needs to be at 299 or secure a bunch of big exclusives or buy a developer that owns desirable IP.
I would be very happy to a 299 dollar price point for the XB1 and I am sure they would sell a ton of them. Whether or not MS as a business wants to take on those losses is another story. We actually don't know how the average customer will price the performance differential between the 2. It may be that a bd-driveless XB1 with a re-engineered case and motherboard can hit that price point and get the XB1 back on top or merely having bundles and temp price drops on existing skus can serve the same purpose.
I think we are underestimating somewhat how much of an effect not having the kinect bundled in will have on sales of the XB1. I am not saying it's gonna be a blow out in June or July for the XB1 but let's not forget that they introduced the "all seeing eye" ( down to infrared ) during the NSA scandal and I think of lot of folks, certainly in the US, reacted negatively to it. I know you don't need it connected but why pay MORE for something that is a negative added value ? I know the timing of the scandal wasn't fair for MS and it is silly to engage in fear mongering about the kinect but that doesn't mean that sales weren't affected at least for a certain demographics that previously might have bought the thing. It's not logical but logic isn't the best gauge of consumptive behavior .