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I think we know that Sony isn't really ready yet to release the PS5.  But assuming they were ready, then they should release the PS5 as soon as possible.  Microsoft should also release the Scarlett as soon as possible.  Both are losing market share to the Switch.  The longer they wait, the harder time they are going to have in the Generation 9 competition.

Switch is already the go-to console in Japan.  I expect PS5 to sell about half as much as the PS4 did in Japan (maybe less).  Everyone in Japan is just going to want a Switch.  North America can easily head in that direction too.  Switch is already the best selling console in North America this year, and everyone knows that Nintendo sales are very heavily weighted toward the holiday season.  That means that right now, Switch is the hot console in North America.  It is the system that people are excited about, and that kids are going to beg for, so they can play with their friends.  The longer Sony waits, the more they are going to lose sales in North America too.  They are really running the risk of losing in both Japan and North America like they did with the PS3 (or worse).

Sony has to worry about Microsoft too, but their biggest competition right now is actually Nintendo.  If they don't consider the Switch a threat, then they are going to get one hell of a wake up call after the PS5 launches and they see it selling like the PS3 did for its first few years.