By the time E3 2014 rolled around earlier this month, the original $499 price point for the Xbox One was already ancient history. Still, sitting down with Sony Head of Worldwide Studios America Scott Rohde at the show, I couldn't help asking how he felt when he first heard that the PlayStation 4 was going to launch $100 cheaper than its nearest competition.

"I'm not gonna lie. I remember exactly where I was," Rohde told Ars. "We were in press conference rehearsals last year. We had a feeling they were going to come in at $499, but we weren't sure. So yeah, we were dancing in the aisles and high-fiving. It was great. Anyone that came in on an interview, it didn't matter what the question was, I could always just answer it with $399. It was the answer to every question."

The process to get to that moment started way back in 2008, when Sony started work on the PS4 hardware design with a $399 price point firmly in its sights, Rohde said, echoing similar sentiments from Sony Worldwide Studios President Shuhei Yoshida. The focus on the lower price point was the result of hard-earned lessons from the previous hardware generation, he said.

"We thought we could overcome Microsoft in the previous generation because the first Xbox didn't have that great market penetration, and PlayStation 2 was so dominant in that era. We wanted a machine in PlayStation 3 that was amazing, that could do everything, and completely misjudged how much the market could bear in terms of price point. Also, coming out a year late, it took us some catch up to get where we needed to be. But we're proud of where PS3 ended up and how it's still going strong today."

And now that Microsoft has ditched the forced pack-in of the Kinect to be more price competitive with the PS4? Rohde's reaction was more muted. "I think that, to be truthful, we always assumed that eventually they'd have to release a SKU without a camera," he said. "So we were waiting for it to a degree, and we were ready for it."

Steam Machines competition? "Maybe someday"

While the console market is relatively stable at the moment, Valve is still threatening to shake things up some time in the future with its recently delayed Steam Machine roll out. Rohde seems to think that the software-focused Valve may have bitten off a bit more than it can chew regarding its entry into the hardware market, though.

"It's not an easy trick to get global distribution on a piece of hardware," Rohde said. "That is something that Sony is extremely great at and has been for years." When I pointed out that Valve was outsourcing the actual production and distribution of eventual Steam Machine boxes to hardware partners, Rohde said somewhat wryly that "we've seen that model attempted before." He later confirmed that was an explicit reference to failed experiments like the 3DO, which saw a single hardware standard licensed and developed by a number of hardware makers.

In general, though, Rohde seemed to regard Valve's upcoming console/PC hybrid experiment as a big unknown at this point. "[The Steam Machine concept] is an interesting device," he said. "It's in its infancy, we don't know exactly what it is, even, or when it will happen or what it will actually be. I guess they've settled on a controller. We're not even really sure. They've been bouncing around for a while."

Is it the kind of thing Sony sees as a potential competitor? "The short answer is 'Maybe someday,'" as Rohde put it. "It's not meant to be an arrogant statement. It's not something that we're saying, 'Oh yeah we're not worried about them.' I think we're always interested in anything that comes into this space because it's fascinating to all of us. It doesn't feel like [an immediate concern]. But it's an interesting technology.

"I think that's what's great about the technology industry in general is that people have to try different distribution models, different things," he continued. "I think the entire rest of the industry will be watching carefully to see what happens there."