Mid-cycle upgrades can still make sense whenever CPU/GPU/APU production process refinements will allow to offer higher performances and lower prices and power consumption (that drives down a lot of other production costs too) than the components used in the launch models. It's more common to di these upgrades just for lower costs and power consumption, but if higher HW power for a premium model can be achieved too without totally redesigning consoles, premium model can happen, if their dev cost remains under control they don't require unreasonably high sales to at least break even and possibly profit a little too. Premium models also have some marketing return even for those that won't buy them, they help keeping the image of an up-to-date console.
The only condition to avoid real failure is to never let premium model development and production costs skyrocket.
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