So after a lot of talk about the GPu/CPu in the Xbox One S I was expecting it to be a bit faster so I did some research and stumbled on this youtube video: https://www.youtube.com/watch?v=Ju5cTcrWy4E

They test some games, project cars, hitman and even Alan Wake, and it shows the hardware is indeed a bit faster. Its not a huge increase but overall its always nice to have less performance hits in your games, especially the reduced tearing in games that aim for 30fps seems like a big bonus.

That 7% extra boost is likely a bonus, I'm sure anybody that's purchasing the XB1S is for the slim look and/or 4K player.

A slimline with a performance increase over the base model? That's awesome. It allows game companies to keep pushing the boundaries of performance, and letting the consoles catch up as they go.

Interesting stuff, console revisions usually don't have a realworld performance advantage over the original hardware. This is almost more akin to the New 3DS than a traditional "slim" model.

Except the fact that the New 3DS had some exclusivity at launch.

I was referring to the hardware itself, not the surrounding circumstances. I don't recall, say, the PS3 and 360 slim models having improved performance in-game versus the original hardware.

and people doubt the Neo. Developers wont even need to patch the games

This is the way it should have been on the Xbox since day 1. The original Xbox was x86-based. Basing the 360 on the Power architecture was a lost opportunity to have an iterative update that was nearly fully backwards compatible. It also complicates 360 backwards compatibility on the One. I'm fine with iterative updates so long as they're well done, like this one was.

It makes sense, with the improvements in AMD chips it's an upgrade that, except for the minor redesign, comes for free or even with costs reduction, and as Ruler wrote, without any need to patch games, that will be necessary only to fully use the HW power of the boosted XBOne and PS4 models, not for the Slims.
And the Slim, besides refreshing the console image WW, could bring XBOne some satisfactions even in Japan.

shouldnt this be the 4k gaming console? with just 7% speed upgrade its too low. I think 2d sprite games shouldnt be a problem.

For VR its too low to!