A 6990 is 700 dollars alone. Next year in 2012 it will be 500 dollars if we're lucky. Beyond that, the CPU + RAM + HDD, etc- will make the system cost a fuck ton. Your looking at an on average 800 dollar system in 2012 with an insane amount of heat and power issues.
This is why we all want our consoles in mid-late 2013. A 6990 equivalent can be reached at that time.
Oh man I love these pre-announcement times and the faulty reasoning it brings...
There a couple of things at play here... for arguments sake let's say MS will do this the conventional route, the smart route...
They contract AMD to design a chip for them. This is most likely what is now a higher mid range next gen chip (not for sale at the moment) with elements of the chip after that.
AMD pockets money for that, straight up in the pocket. I believe I read somewhere sometime it was 100 million for designing Xenos (could be significantly less, the other figure in my head was only 20 million) and MS got the IP of the chip for that price. They do have to pay some royalties though. Basically what happens then is that AMD/ATI have done their job (although they might give support for die shrinks). It's up to Microsoft to produce the chip. So the 'only' costs for MS are the wavers of silicon and royalties.
What happened with Xenos, the chip in the 360, was that they designed a chip in R500 range (X1800/X1900) with elements that were only introduced in the chip after that. MS got a say in what they wanted so for instance the chip was tailored to suit eDram MB and in comparison a lot of shader units. (But moderately clocked to keep power consumption reasonable).
Comparative cards like the X1800XT and X1950GT would run you between somewhere in the ballpark of 400$ when the 360 launched.
The same goes for the main CPU. Xenon in the case of 360 was contracted by MS at IBM. IBM designed the chip for a certain amount of money and gave MS the IP so MS could do with it what it wanted.
Those one time fees not withstanding, the main thing that determines the price of those chips are the yields (and some royalties to be paid). In the beginning it won't be cheap (lots of broken processing units) but as the process matures yields will get better. That $400 graphics card cost MS $140 when it launched, and it dropped 40% in the first year according to estimates.
In 2005 there was similar talk about how the box would be a million bucks because of the parts. But it won't be... The costs for MS aren't anywhere near the price you as a consumer would pay for similar PC parts.