PS3 was behind 360 for most of the generation. Sure PS5 could outsell Xbox at $399, but can it outsell Lockhart if it's $299? $200 difference is a lot. They might still win in the end in terms of overall sales, but Xbox will surely be a big winner and attract a huge chunk of casual market with such an aggressive price. I don't know, the $499 PS5 doesn't make too much sense to me.
You're making waay to many presumptions. First, a $299 is speculative at best and in my opinion, unreasonable for what the console potentially contains. Compared to the Xbox One X which still contains an MSRP of $499 two years after launch, lockhart will contain a new generation RDNA GPU, a significant jump in CPU, a faster RAM setup that is only slightly less than Series X & an SSD for $299? That's wishful thinking & the price of the One X only proves that.
FYI, I don't believe a 9.2TF PS5 will result in a $399 price if all other components are in parity with Series X either. I don't claim to be an expert on the bills of materials but price cannot scale linear like that just based of GPU tflops alone. PS5 will have to be reduced in other areas compared to the series X (limited RT features, less ram. etc) for Sony to undercut MS $100.
And casuals don't only care about the entry level price of a console. Library matters as well & the first 1-2 years it is always limited. Cross gen will still be a thing for a couple years at least and big titles will release on current gen consoles. Not to mention Lockhart is rumored to be discless as well. You don't think casuals care about buying cheap/older titles at Wal Mart, trade or sell their games? It's easy to imagine a casual looking at lockhart with a limited library with all $60 full price titles & just wait for the Series X or PS5 to get cheaper so can have the option to buy their physical games if desired.