the consoles are trying to survive in the modern era by adding more features and going upscale. It's why Microsoft is trying to make the Xbox One the center of the living room. You look back and the Atari 2600 was $200 and that was $200 in 1977. The SNES was $200 in 1991. the 3DO was $700 in 1993. The PS3 was $600 in 2006. At $400/$500, it's not an impulse buy for a lot of people unless of course they're in that ecosystem and want that product. And if they are in that ecosystem and want that product and can afford it, $100 is not going to phase them.
If you're trying to compete on price, you're going to lose because tablets, handhelds, and cheap options like the impending Apple device (you know Apple is the biggest potential player) will win out. at the high-end, PCs and tablets will win out. A gaming only device has way too much competition nowadays.
All you can do is make the console as valuable as possible and that's through adding features beyond gaming. When you have a 64GB iPad Air going for $700, it shows people are willing to buy if people enjoy the device and enjoy the ecosystem. Apple could reduce the price a lot and still make a decent profit but they choose not to. Marketshare isn't the only thing. They could fight Android more aggressively if they wanted but they choose not to. Let Android have all the $200-300 tablets. We'll give Apple fans a $300 iPad Mini and they'll grow into the real iPads. As long as you have enough marketshare to have a thriving ecosystem, that's what matters. Keeping your fanbase happy is the goal.
I know Sony and Microsoft knows that the consoles have peaked. Nintendo doesn't really care about being #1. All they care about is profitability and carving a niche market that's dependable, and that's what they have. Microsoft is using the Xbox more for mindshare because Microsoft has a less than stellar reputation in the consumer space. In the beginning, Microsoft distanced their name from Xbox and it reflected in their advertising. Xbox was the side project, the black ops division. Don't make fun of Microsoft for making a game system. Now, they try to remind everyone that Xbox comes from Microsoft. That Microsoft can make "hip products." When the first Kinect was uber hot with the scientific and tech community, Microsoft went out of their way to say this was their product. Microsoft wants to be a devices and services company instead of a software company, and Xbox is part of that strategy. A lot of people hype the console wars because it's fun. But the reality is sales are in PCs (330 million per year) and mobile devices/tablets. Consoles have great mindshare but not a lot of marketshare.
For us as console gamers, it's about enjoying our own respective niches and ecosystems. We all want all our devices to be as cheap as possible. Never look a gift horse in the mouth. But we're all willing to spend for the products we enjoy. A Prius at $25K is probably a much better value with better gas mileage to boot than a BMW ActiveHybrid 3 at $50K, but for many people, they'd prefer the BMW. I could buy the Kroger's Cola and save 40 cents but I'd rather buy Coke/Pepsi. I was a big time PC gamer forever. But everybody talked on the Xbox and chat parties were so much fun. That won me over to consoles.