That's not how the substitution effect works Phil Spencer. Why are you in power if you can't understand micro 101 subjects? This is basic competition stuff here.
$100 difference, with the difference between the two being one is Native 4K (4K still requiring a hefty investment outside of the console itself), the other Dynamic.
Oh but the PS4 has a wider range of video games.
Sony has been through this before. It's why the 360 was winning for years; despite the hardware problems, the 360 was cheaper. Since it was cheaper, it had a larger install base. Because of its install base, it typically had a wider range of games, it had leverage over third party developers, and it sold more games as a result.
It took years, mottled with price cuts, for the PS3 to catch up outside of Japan.
Now you are in a position of weakness. Your console is effectively a meme price, and you don't even have Ridge Racer.
The average person doesn't care about 4K -- they generally buy video games to play video games. The average person is still in the 720~1080 resolution range.
Like, none of this actually makes sense to me. It just reeks of conceit, a blindness to the market.
Did they profit so little off the Xbox in recent years that they can't even afford a Microecon textbook?
I don't think I'm off base, here. This is typical business bullshit, ignoring the market because you're a true believer in your product. You cannot be a true believer in a competitive market.