Wait til 2018, as they always planned. Next system will be upgradable without having to replace the whole box.

For the X1, get a slim out as soon as possible. Hit the $250 sweet spot. Leave the console at this price for the rest of the generation.

This.
The only thing that they can do is to wait and prepare for the next generation.

They are just going to hold out until 2018 and get a years headstart on Playstation, with their Xbox Two.
Its gonna mean their Xbox One will face off against the PS4 Neo.... which will be a bloodbath.

All sony needs to do to market the PS4 neo, is go "3x the power of our competitors" on their box.
Average consumer will go "hmmm" and pick that instead.

Xbox One will be the slowest of the 3 consoles on the market.

They need to aim for a super low price point. Time to get a slim model out and aim for 199$.

X1 is doing fine, there's nothing really more to say.

Judgin from that GPU upgrade it'll probably be like PS4 medium PC settings, PS4K High PC settings.

2017 is a bit early but I expect a new Xbox fall 2018, launching the new gen a year earlier than Sony again. Also don't expect a 10TFLOP console next year for 399 or 499, too soon. MS can ride it out with the Xbone until 2018, it still has some life left in it unlike the Wii U.

If Xbox 2 is 2017 it might not have as many meaningful upgrades compared to launching later. Multiplats will still be made around the 5-6GB ram limits of Gen 8 and looking at Microsofts output in the first 2 years of the Xbone's life, I don't expect the exclusives that do push the hardware make the graphical differences.

If MS is pushing themselves in that situation, then PS4K will be fine, both consoles would be seen as an extension of the current gen even if MS meant to start a new one. It's in MS's best interest to stay close to Sony and not start disrupting the market, they're in a very weak position to change anything. Sony wouldn't be pushed to release the PS5.

PS5 would come in 2019 or 2020, launching with true next gen hardware, +10TFLOP, 10nm, 32GB HBM3 RAM, native 4K

With full 3rd party support. Hype going through the roof.

Xbox 2 would be like what the Dreamcast was to PS2 hardware wise. The DC launched 18 months ahead of the PS2.

Dreamcast had 16MB ram, PS2 had 32MB

PS4 is already mostly High settings, PS4K with 4.1TFLOP is Ultra settings. The AMD R9 380X which is 3.9TFLOP can run the Witcher 3 at Ultra settings with 54fps.

If you're going to take someone to task for being '...ignorant of reality and just plain wrong.' you should, I think, at least read what the man wrote and not what you assumed he wrote.

He very clearly stated that '...they thought this gen had the potential to sell over 1 billion consoles'.  You then accused him of writing 'they' said 'they' could sell 1 billion consoles.  What he actually wrote was something you confirmed as being accurate in your next two sentences i.e. that the traditional console industry had the potential to sell 1 billion.

Please explain the bolded. How will the PSVR consume a good chunk of their money? R&D costs are already incurred, the hardware itself is being sold at a slight profit. Even if the project doesn't make back the money spent on R&D, it wtill won't consume a good chunk of their money because the costs have already been incurred, and Sony's Playstation division still made a hefty profit in the period it was incurred.

How cheap would upgrading be then?  If it's not much that's actually a possibility.