But the machines can use more modern technology which can be cheaper to manufacture, thus bringing Playstation 4 Pro/Xbox One X levels of performance to lower price points.

It's essentially how the PC market generally operates... We essentially get new Graphics Cards on a yearly cadence.
Thus the highest performing GPU this year, would drop down a tier in equivalent performance the next year, but sold at a cheaper price.

Plus it also allows for an update in feature sets, so if there is a new hardware feature like say... Rapid Packed Math, Primitive Shading and so on... Then developers can be guaranteed access to those features across all console revisions.

Having Multiple tiers of hardware also allows for Microsoft and Sony to increase the average selling price of consoles.

Either way, it's just a hypothesis that is being thrown around, not something that may legitimately come to fruition.

Pemalite gave a good response.

I will add that the low tier PS5 should have a superior CPU and more RAM (16GB-32GB or whatever 9th gen has) than a PS4 Pro. Ideally it would offer the same as high end model kust to make sure developers are optimizing for that CPU and getting the best out of it.

The only significant disparity in specs between low and high tier should be GPU power. Like maybe 8TF vs 16TF, or whatever is feasible in 2020.

So the low tier would still be big leap over the PS4 Pro, but better equipped for modern games than the Pro. It might be $399 vs $599. Most people would buy the low end because it plays the same games, maybe even hits 4K often. Meanwhile the high end model better achieves 4K, 60 fps, higher graphics settings, etc.

I believe this is an ideal scenario so consumers can get the price or power they want at launch.

yes, ideal for consumers, but not for marketing. It would work if they make a backward compatible PS5 low tier hardware but sell it with the same name and performance as a ps4 pro as it were the same, just for cutting costs. And the PS5 would be only one. 

Console market is not Graphic card market. 

I would be very disappointed that they bothered doing a new console that was so close in power to the previous gen. They need to come out with PS5 when they can release a 20 TF system at the very least.

8tf in 2020 is just laughable.  Microsoft came out with a 6tf system in 2017 lol. 

The market is savvy enough the understand the difference between low and high end console. Theyre experiencing it now with mid gen upgrades but still lean for the cheaper model because it plays the same games.

The argument for budget priced consoles is theyre underpowered and thats always the case when appealing to the masses. Having a premium console at launch changes that narrative. Its not difficult to market, can figure it out.

The mid gen upgrades biggest upgrade is the GPU. There evidently is demand for more visually capable consoles even at a premium price. So maybe it is a "graphics card" market at some level. At the very least it need to have a relatively powerful GPU in all models.

If they launch a low tier PS5, people would demand that runs all the games that the high end does, hence being a bottleneck in the developement of the high end ps5. The only difference the machines can have is the GPU. CPU and Ram should be the same, and the low tier one would have a lower Teraflop or bandwith gpu with less memory. Both would have to run the same games for 7 years at least. Still I don't believe they would do such a thing.

Thats exactly why there is speculation of MS not supporting Generations anymore. That method of high and low end machines will reduce costs, support BC and bring in that Steam App type gaming experience. Basically just like PCs are today. No one is forced to pay top dollar for one machine when there will be an entry level system etc. Its actually a great system.

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