Performance won't really matter, because on consoles games get made and optimized for the system. And multiplatform titles get developed for the weakest platform, so at best XB would get maybe few optional tweaks. Still they should be close enough to where it won't matter badly.
Price wise, Sony could afford it. They are undisputed winner of current generation, which already tells you how much specs matter, or rather don't. Sure One X did good, but it didn't help MS winning. Plus Don't does have exclusives on their side, while MS exclusives can be played on PC as well. But if they do go higher or same as Series X with price, they might get bit of disadvantage there. But all things considered, it might still end up doing fine.
Though I still think next gen will be fought out mainly on features, be it what console can do or extra stuff like Game Pass, one if things MS nailed really well. Plus it will be battle of different approaches, Sony's exclusivity and old school of doing things, versus MSes ecosystem approach of getting games to gamers where they want them, PC, console or cloud, which is more of new way.
Though there is one thing MS could do to kill it in this generation. Put full version of Windows on XBSX, so you can boot into console or basically desktop. That would be huge deal, since now XBSX would be pre-built PC or console. Also it would go miles in convincing parents, use it as family computer and computer for school in Windows and as gaming console in free time. Plus you could use Windows got titles where you can exceed FPS on console and console version where you might struggle, so it is optimized for the system for you. But of course I doubt hey will do it. However it would be killer feature.