My DOA comment is probably too dramatic and I'm usually wrong about these things but used games/trading games/gifting games through family is a big deal for price sensitive consumers. So yes, I think a $300 discless model would do ok but I do think it would miss out on a substantial part of the market.
i just really hope LH doesn't come out. I'd rather they launch XSX for $500 and work it down in price over time like they've always done, sadly that won't happen since it's got "series" in the name
I feel like you're way over-selling the price-sensitivity angle on physical disks.
First off, the used-games economy is having a tremendous monkey wrench thrown into it by the pending demise of GameStop. Since the price of used games generally isn't very far off digital on the "wait six months" plan, the real value in the used games economy is being able to re-sell your game. But without physical locations to dependably and conveniently trade your games, it's increasingly inconvenient to get value for your used games. (Yes, I get it. If you've set up an Ebay store and you've turned your buy-and-flip strategy into part-time hobby, it's not a great inconvenience. But I think that's a very narrow subset of gamers.)
Realistically, we're no longer in era of gaming where people don't have enough to play and have to constantly be looking for new content. Instead, between PS+/GWG/F2P (not to mention subscription services like PS Now and GamePass) and play-forever games like competitive mulitplayer games and Minecraft/Roblox, people generally have more games than they have time to play them. So I think the importance of squeezing extra value out of your (increasingly infrequent) gaming purchases has greatly diminished.
I'm not saying there are no drawbacks to removing the disk drive. But what I am saying, is I don't think that's a deal-breaker for the portion of the gaming market that's going to be looking to save $200 on the price of their next-gen console. Assuming MS has appropriately designed XSS to run 4k XSX games but simply at 1080p resolution, I think we're going to see a lot of review articles around launch that put the three consoles side-by-side to compare the games. And I expect that they will conclude that most people will not be able to readily discern the difference between them (unless sitting very close to the TV or gaming on a very large television), and that the recommendation will be that unless you're a hardcore gamer, or tied to the Sony ecosystem, or you game on a 75-inch television, the easy recommendation is to save the $200 and get the XSS. And if you're a parent buying a console for a kid, or you're a game who mostly just buys COD/Madden/FIFA/NBA2K each year, that's going to be a very compelling argument.
In some ways, a 13-14TF PS5 that costs $500 is a best-case scenario for MS and the XSS. A $400 9.2TF PS4 would have made the XSS value proposition much more complicated.
[That said, the XSS isn't necessarily the sales slam-dunk that I might appear to be characterizing it as. We live in a world where people buy 42-inch 4k televisions where the resolution increase is only noticeable when viewing from two feet away, because more=better. So MS is going to have to be very sensitive about how it frames the "same just at lower resolution" pitch.]