Within 5 minutes, I made this build on newegg:
Keep in mind that the newegg margins are already there (which are also paying for the transport/distribution), and the fact that it's a Mini-ITX takes about $50 more (board+case) than a similarly specced Micro-ATX form factor.
It's a gaming machine that would be 3/4x faster than that Xi3 at half the price.
It has less memory bandwidth for the GPU than PS4 (though it's not shared with the CPU), but it's definitely within the same class of performance as the next-gen consoles.
I do believe it's possible to build (and sell with a profit) a Mini-ITX gaming PC for $500 at a similar theoretical performance to next-gen consoles, just by going through standard reseller prices for off-the-shelf products. No crazy deals needed.
Of course, it's $500 for the box alone. Then we're missing the peripherals, the OS, all the network infrastructure and services that the other consoles will bundle out-of-the-box. Not to mention that the hardware can't be pushed as much as the consoles because of OS/API/driver inefficiencies, so it wouldn't output the same level of graphics as the next-gens.
I guess this is where SteamOS and Mantle enter the game to get the "full package" as a console competitor.
EDIT: yes, there is a 300W Silverstone PSU included with the case. Silverstone PSU are made to be taxed at the nominal wattage with the advertised efficiency. In this case it's 300W at >%80. 300W should be more than enough for the 100W CPU + 85W graphics card + everything else.
You would also need os licence, optical drive, game pad, cabling, localization work for manuals and software, nice box to put hardware in, assembly and whatnots(like reasonable blu-ray playback software)...
And then how is the insurance and durability on the newegg hardware versus consoles? It's not like those parts alone make a console unless you have similar software and UI experience as consoles have. Also to compete with XB1 or ps4 you might need to beef up the cooling to be quieter and hence more expensive. Before you notice it's 699 vs. 399 against ps4. Comparison against XB1 is even worse as where do you get kinect2 experience to pc?
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