I see your point. But if my suspicions are true, 3yrs from now (or after the PS4 neo has been released) we will be talking about a PS4 Trinity. Which will be even more powerful than the Neo. Then, sony would probably lock down game certification requirements for all PS4 games to run native 720p and PS4neo/Trinity to support 1080p and up resolutions. 

By that time, anyone that owns a PS4 would have had it for at least 3-6yrs. And people that own a Neo for at most 3yrs. Sony would probably be banking on people who had the PS4 but didn't upgrade to the Neo would upgrade to the Trinity. 

Whole point of all this, if my theory is correct, is blurring the typical generational switch and retaining all of its existing install base. I sincerely feel that internally, Sony doesmt think that even the typical 8 times boost in performance we get from generation to generation is enough to create a leap in quality that will provide experiences that are impossible to have on lesser hardware. 

I mean just look at the PC space. we already have hardware that offers that "generational leap" (in specifications) when compared to the PS4. Yet there isn't an expericne on the PC that simply can't run on the PS4. they may have to sacrifice framerate and rez or even rez of textures. But any game on PC can probably run on the PS4. 

No because the PS4 has more/better exclusives than the X1.  The PS4 and NEO will have the exact same library.

The problem is that it's always more expensive to run separate fabs even on the same process tech (this is why Intel and AMD sell the same CPUs cut into various models with lasers rather than run separate batches of each).

With something as basic as a handheld, it's not too horrendous, particularly when you're dealing with fairly tiny processors.

With the fairly large APUs (in die space), it's pretty expensive and the newer process techs have waiting lists from around the tech industry (MS, Sony, Nintendo, AMD, nVidia, etc). Only Intel, Samsung, and a few other unique players can skip dealing with either GloFlo or TSMC for competitive ICs on new die techs (and even then, they've been a gen+ behind Intel for years now).

So yes, running two PS4s, to say nothing of the different ram sourcing, etc, would most likely cost more than producing just the Neo. We're not talking plugging in a different hdd, but new mobo revision, separate assembly lines, QA, all that sourcing, it's really complex.

Sony would be more profitable selling just a Neo @ $349 than selling Basic @ $299 and Neo @ $399 assuming the split is 50/50, because the average cost of production would be higher.

What is much more likely is that production of standard PS4s has either already ended, or is already slated to end when supplier contracts are met, existing materials stockpiled for the standard model are exhausted, etc, some combination thereof.

It goes without saying that this is the last thing any console mfg ever wants discussed in advance, instead waiting until the last minute to 'diskinect' that model from existence.

Yes, this seems to be the most logical outcome. If the PS4K is more expensive than the regular one, it won't move as many units as people think, and if it's the same price, Sony would have to make a discount to the OG model (or abandone it completely, which would really anger fans). And whatever happens, there's going to be a massive sale of PS4, with all of the people buying a PS4K selling their old models. With that many old PS4 plus a new model, stores will make a decent discount of used PS4, and that will make a lot of casuals go for the used and cheaper model.

So yeah, waffles.

I like Waffles and no the NEO won't outsell the X1 and all it's versions.

Yes I think so because eventually the PS4 Neo will become the standard PS4 model, phasing out the older model entirely.

I would say yes.

I think Go failed because they misunderstood the audiance , they though digital is the future and physical games will die.

Ouya,Playstation TV failed for the same reason ,so I think PS4 Neo will fail too I don't think people want upgradable consoles just like PSPGO will devs really support it?

It's also remind me of the PSX.

In a world where Neo is sold for only $20 more than the original PS4, than sure :)

Otherwise no. Even if we assume something extreme like PS4:120m, X1:30m, Neo would need to have a 30% attachment rate to all PS4 purchases in order to outsell Xbox. Seeing as PS4 has already reached 40m, Neo will essentially have to Match sales of the cheaper and established model 1:1.

They thought digital was the future... and in the long run they are right, especially on mobile devices. iOS and Android devices didn't fail to get a very big segment of gaming revenue, PS Vita has a high acceptance of digital games due to constant PSN deals and PS+ games and the digital share of 3DS software revenue is also climbing every year.

It is more convenient to go on vacation with your handheld which has all your games installed instead of additionally carrying a case with game modules around (with the danger that they get damaged, lost or stolen).

The problem of the PSP Go wasn't the digital distribution per se, the problems were the sudden change of distribution channels as an afterthought with no clear concept, no game-transfer-solution for PSP owners who wanted to switch to PSP Go and a limited game catalog compared to the "normal" PSP.

And PS4 Neo won't be digital only, customers will still have the option between digital and retail games.

PSP Go was not upgradable, your argument makes no sense.