I feel they'd have to go lower. Right now being 50 bucks less works because I believe that the perceived difference between $349 and $399 is greater than the difference at $249 vs $299.
We already know that even as is, the X1 is very much struggling. In fact, it's not even a struggle, the PS4 is just easily beating it. A $299 PS4 would, imo, be the worst case scenerio for MS this year. $249 plus some free games may cut it, but I could see them going down to $229 or even $199 like they did last holidays if they want to replicate the nov/Dec success.
Crazy that if this happens, the X1, a brand new console (relatively speaking), might be about or even cheaper than the near 10 year old PS3.