Considering the economy and competition from cheaper alternatives like Smart Phones and Ouya, it seems $500 would be a VERY high asking price.
I keep seeing this kind of argument from different circles, but I still firmly believe that the market for gaming on phones and tablets is
completely different than the market for dedicated consoles. It's like the hardcore vs. casual debate - the Wii sold primarily to a casual audience, but they didn't come through and buy enough games to satisfy third-parties. By contrast, the PS3 and 360 attracted millions of hardcore gamers, but failed to capture a casual audience. Different prices, different goals, different audiences. Personally, I've yet to meet a single gamer who takes smartphone and tablet games seriously - the closest example I can think of is a guy I know who bought one of the Final Fantasy games for his phone to kill time at work.
As for Ouya, people keep trying to talk it up, but it's still a flash in the pan product held up only by what people want it to become, not what it actually is, which is a casual gaming wasteland that offers nothing to a hardcore audience that's more interested in games than empty rhetoric.
The only thing Sony has to do is offer compelling hardware at a price that people can swallow (and $400-500 really isn't too bad, considering a PS3 is $250-300), and not break too strongly from the things that people like(d) about PlayStation so far. Whether they accomplish that is up in the air for now, but they're playing on a different field than Ouya, Android, and iOS.