The gap between a PS4 and PS4 Pro is wider than the gap between an N64 and N64 + Expansion Pak or 3DS and New 3DS. 

Just saying. Lets see how games are in 2 years, wouldn't surprise me if some PS4/XB1 versions of games are really bad. Especially as PS4 Pro is going to get pushed by the more powerful XBox Scorpio. Someting is gonna have to give or Sony fans can accept lesser versions of third party games. 

I think what M$ means when they say "generations" are over should be pretty clear at this point. There will come a time when the Xbox One will become obsolete, but all future Xboxes for the foreseeable future will continue to be able to play old XBone games.

Well at least Sony won't gate content behind PS4 Pro no matter how big the jump was when Gamecube could have gotten some WII games despite that being a far lesser jump from PS4 to Pro in terms of compute power ... 

Sony fans accepting lesser versions of third party games was practically a norm but the bigger deal was that they were cheaper while offering a far better value compared to their competitors ... 

MS is totally changing the memory architecture with Scorpio (more like PS4 in fact),
 while Sony is restricting themselves to closer compatability with PS4OG, to the point of retaining crappy Jaguar cores.
Sony's approach means OG/NEO is just a settings tweak, Scorpio is a new platform as far as game engine optimization is concerned.
(although as it is de facto closer to PS4 architecture, it will be more enticing for devs to deal with, vs. a totally unrelated architecture)
I don't see Sony continuing with Jaguar any further, which they stuck with (only upclocking  30%) only to make optimization easier IMHO,
so whatever follows PS4 pro/neo is going to be a bigger change than PS4 neo was from PS4 og, IMHO (even if largely x-compatable in games).
Since PS5 will need to compete against not just Scorpio but Scorpio 2/NEO etc, Sony will be looking at architectural improvements.

RIght, and more than Game Cube vs. Wii, which is really the closest analogy.  (we can now call Wii the Game Cube Pro, I guess)
Difference is that Sony is mandating devs to target both PS4og and PS4neo, but Sony could have done that with PS3/PS4.
Pretty sure that when PS5 is released, Sony will drop the PS4og compatabilty requirement though.
(obviously, if a dev also wants to target PS4og along with neo and PS5, they can do so)

I guess they'll have to accept them til the PS5 launches a year or so after the Scorpio.  Of course, they'll still have all those true exclusives to play.

That would be B/C, which is nothing new.  For there to be a true generationless market, systems would also have to be forward compatible, as in when the PS5 launches you can buy a PS5 game and the disc will still work in a PS4, only with downgraded visuals.  Highly doubt this will happen.  At most, they may make it where the DS4 fully functions on the PS5.

Yep and I hope they also mean that new consoles won't have exclusive games (except VR of course) so when/if "Xbox Two" is released you can still play all the new games with older models granted you have a powerful model enough. Kind a like PC. So you wouldn't necessarely have to buy the latest console to play. I think this would be a great thing whether you want to call it a new generation or not.

Yes, they're mainly talking about B/C spanning multiple generations, and a shared OS across all their devices. There will be a degree of forward compatibility, but ultimately there will be a time when the Xbox One can no longer run newer AAA games -- it's inevitable. That happens with PC, and with smartphones; two other examples of "generationless" markets. I think M$'s ultimate goal is for software to be tied more to the OS than the hardware it's running on. They're talking about ending generations as (they think) we see them today, which typically results it a total reset at the beginning of each generation. What M$ wants to hold on to their existing playerbase over multiple console releases by limiting fragmentation of their playbase, not to stifle technological progress, which would be the only way to keep OG XBone relevant forever.

This sounds exactly right. I thought Microsoft would totally try and usurp sony with scorpio in the power stakes. But profit margins are never huge in console hardware, so it's more likely they will try and maximize profitability off it, given that in 3-4 years time there will likely be another successor.

I don't think the OP understands the strategy that either company is proposing... both Microsoft and Sony are doing exactly the same thing. They will simply adopt a universally accepted 'tick-tock' cycle of hardware releases - Xbox One (tick), Xbox One 1.5 (tock, Scorpio) then Xbox 'Two' (tick). Sony - PS4 (tick), PS4.5 (tock, Pro) then PS5 (tick). The only exception you might see is simultaneous releases of 'standard' and 'pro' editions with different price tags and capabilities.

Both companies will have new major and incremental releases going forward. The only difference (compared to previous generations) is that both platforms will support forward/backward compatibility. This is good and it mirrors what the rest of the industry is doing. Think of it as apps/services you use on an iPhone 6/Galaxy 6 work perfectly fine on the iPhone 7/Galaxy 7 respectfully.

The games console market is one of the few markets that has required that each 'generation', people have to go out, scrap all their old gear and purchase brand new equipment. Those days are gone (thank goodness). So, in that respect, both MS and Sony are adopting a 'generationless market'.

Yes, it means we will no longer see massive leaps and bounds in terms of technical ability, but it also means we don't have to suffer 10 year generation cycles where the platforms become stagnant and boring.