Considering they dont make money off of game sales I doubt they increased the price just to be cartoonishly evil.

Even though I am a huge gamer and connoisseur of tech. In the inner words of my more responsible self when it comes to buying this thing at that price, "f*ck that!"

I think the idea built into that theory is that people expect a PC to be expensive and in most cases need to have one for other aspects of life, so if consoles become overpriced (as they have) it will just be easier to spend a few hundred more on a better PC (or an upgrade to the one you have) than to spend $600+ on a console. But I think you are right, RAM and SSD price increases are jacking up PC prices so much that the math won't work out.

I guess the "switch to PC" idea still works for people who already have a decent PC and were just thinking about getting a console to play live service stuff, since most of those games don't require high specs anyway.

It doesn’t mean that they are selling huge quantities. It’s just means that they anticipated very low sales for a very expensive niche product and it sold a bit more than they expected.

Still only going to be a tiny quantity compared to mainstream consoles.