The pattern for console generations has been a very logical one. As developers discover new hardware techniques and graphics, newer devices are released to better support them. This has come with incremental controller improvements, as well as interface improvements over time.
When we were in the seventh generation (PS3, 360), there were two major problems: Graphics were nice, but were not keeping up with the move to 1080p HD TVs, as most games played at 720p, 30fps. With memory limits, many games had a pretty low cap on how many enemies could be onscreen. And, the more popular engines like Unity and Unreal were taking a lot of effort to port over. It wasn't easy to do a cross-platform release, even for a basic game, that would reach onto the Wii as well.
In the eighth generation, internet integration improved, as well as both major consoles moving to the more portable x86 architecture. Graphics took a pretty notable leap, more frequently allowing for 1080p rendering. It also became more and more common for small-name indies to release their Unity / Unreal games on consoles.
One thing that's interesting to note is, during the E3 demos for this generation, there were plenty of instances of such low-spec indie games releasing on the new consoles, even though they were using pixel graphics. Such games were generally so simple, they COULD easily run on the PS3/360, but porting to those PowerPC architectures wasn't an easy thing – far easier to ride the wave of popularity on the new consoles.
Now, though, we come to the ninth generation, and it's interesting to look at what's improved. Once again, the graphical capabilities have increased – but from some perspectives, the "return on investment" of the graphical spending has somewhat diminished. If you take a person who hasn't kept up with gaming, and show them both The Witcher 3, and Assassin's Creed: Valhalla, they actually might not notice a tremendous upgrade (Digital Foundry always will, as will enthusiasts – that's not being contested).
In addition, many of the improvements have been focused on user-choice upgrades; 4K, HDR, 60fps, are all features that people may or may not use on their TVs. Most PS4 games did not support these features, but a game that released on the PS4 can often be enhanced with those abilities with the new hardware – and this can be done without making new textures or new content (on the vein of, say, the Shadow of the Colossus or Demon's Souls remakes).
Consider also that a PS4 released in 2013 is still going to be quite capable of playing Unity games released in 2025, like such (fictional) examples as "Guacamelee 4", "DUSK 2", "The Stanley Parable 2" – such games don't really stretch consoles to the upper limits of their graphics, and haven't needed every ounce of the PS4's capabilities. For the most part, they'd be getting a net loss in potential consumers by restricting their audience to PS5 / XBS|X owners.
Xbox has, in fact, primarily focused their messaging on the Series S/X around how it can improve the play of the games players already own, rather than advertise new games coming out. As more people become attentive to 60fps and 4K, this really might be the right direction to take things.
For the most part, I have viewed the new console releases as a higher bump from the "Pro" models of consoles we'd been seeing in prior years. I feel like most parties get the better benefit by treating this as still the Eighth generation of consoles, through the lens of "game compatibility" (in which game box art shows it to be only playable on X console). We might actually see very few games for the next few years go solidly into the next gen (with no PS4/Xb1 release) considering the aspects of diminishing returns on graphics, the strong enhancements to such releases made by playing them on a PS5/XbS|X, not to mention that many publishers won't want their games to go well beyond what could ever run on the Switch. (If they had, we wouldn't see Witcher or Overwatch release on it)
This might even mean that the PS4 and Xbox One will remain effective low-cost options in the future for people that are looking to get access to "mild graphics" games – a bit like buying a midrange gaming PC. This will lock people out of playing the new-gen exclusives, which may end up being an uncommon thing if I end up being correct.
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