Microsoft can certainly convince consumers that the Xbox One is worth $500.
In today's tech world, that really isn't that much money for a device that you'll use for 5-7 years.
A harmony remote system is anywhere from $250-350.
A semi-capable Smart TV like the 2013 Samsung model will be outdated by next year and costs double a normal TV.
An AppleTV costs $100 and a new model releases, what, every two years?
The Xbox One offers better control of your living room than a Harmony remote, will have a richer application marketplace and better UX than a Smart TV, will have a better app/games marketplace than a Apple TV while maintaining an objectively equal games marketplace to a PS4, and it is the first device to allow hands free control of your living room.
You can buy a PS4 and a Harmony remote system for $650-750 (+ $60 if you want camera). Or you can buy an Xbox One + PS4 for $900.
You can buy a Samsung Smart TV + PS4 for $2000+ or you can buy a normal HDTV + Xbox One + PS4 + 4 games + 2 years of PS+ and Gold for same price.
There is lots of value in an Xbox One if you want a top-of-the-line entertainment system.
If you don't care about any of that entertainment stuff or Xbox exclusives, and you just want to play games, then all power to you to buy the cheaper PS4, that is just logical.
But to say that consumers can't be convinced that the Xbox One is worth $500, and even $60/year, is a bit naive.