There would totally a market for a $600 console if it wasn't for the stigma of the PS3 launch. People are out there buying >$700 phones and graphics cards, so why not consoles as well?
The actual price will probably be between 400-500 dollars. Hopefully they'll stuff as much technology as possible in the thing and go towards a pricing of $499. A cheaper and less powerful model would draw too many straight comparisons to the PS4 Pro and Microsoft really need to do something beyond that to differentiate in the market. There will probably also be some sort of bundle with an included VR headset and motion controllers for around $799.
I fully expect them to drop the price of the Xbox One S to $199 at the same time, so admittedly this would leave a huge gap in their portfolio in the 200-400 dollar range. Perhaps Microsoft could fill that gap with various bundles.
What I'm most interested in is how they're aiming to sell the "Scorpio" to people with relatively powerful gaming computers and console players without 4K screens. Maybe the ability to use a wide array of VR solutions will be their "killer app".
@rongalaxy: You can already find 4K sets from companies like LG, Sony and Samsung for around $500. Not necessarily ones with great deep colours or the kind of response time you'd want for gaming, but 4K sets none the less. And the content issue is about on the same level as during the Xbox 360 and PS3 launch. UHD movies are in stores, streaming services like Netflix offer 4K content and several TV distributors are starting 4K channels this year.
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