I think the $399 price is unlikely, but would make the product an easier sell. I think $499 is the most likely, but will mean a 50/50 crap-shoot at best for whether it gets the desired market penetration.
I think in either case, Scorpio is less mainstream than a lot of its audience probably assumes. Its quality as a product is almost completely down to how well Microsoft implements "universal" upgrades to visual quality, including its back library.