Yea, this isn't happening next gen. Devs will be focusing on getting their games running at 4K or 4K CB, while still looking better than this gen. Maybe a simplified form will appear on the PS5 Pro, but I don't expect real implementation until the PS6. 

A bit of a clarification:
I am not saying we won't see ray tracing on the PS5.
It will just be very low quality ray tracing, and it will be used sparingly.
Cutscenes, simple scenes, to fill in the gaps in SSR, and stuff like that.
Doing ray tracing at half or quarter resolution, while relying on rasterisation for the rest, would help a fair bit.

https://www.youtube.com/watch?v=siui7gLxcIQ
To my knowledge all the major engines (Unreal, Unity and CryEngine/ Lumberyard) support this type of approach.
It is even used in a few PC games, today!

For now there is no need to render the whole screen, just the most visible parts to save power. PS5 will probably not need any dedicated GPU hardware for DXP. For consoles this is just the beginning, much like vertex/pixel shaders in PS3.

Microsoft wrote:

...You may have noticed that DXR does not introduce a new GPU engine to go alongside DX12’s existing Graphics and Compute engines.  This is intentional – DXR workloads can be run on either of DX12’s existing engines...

...DXR will initially be used to supplement current rendering techniques such as screen space reflections, for example, to fill in data from geometry that’s either occluded or off-screen.  This will lead to a material increase in visual quality for these effects in the near future.  Over the next several years, however, we expect an increase in utilization of DXR for techniques that are simply impractical for rasterization, such as true global illumination.  Eventually, raytracing may completely replace rasterization as the standard algorithm for rendering 3D scenes.  That said, until everyone has a light-field display on their desk, rasterization will continue to be an excellent match for the common case of rendering content to a flat grid of square pixels, supplemented by raytracing for true 3D effects...

This is the result of their denoiser and it runs at 1080p/30FPS on a Titan V ... 

Looks neat I suppose but gameplay always comes first for me.

The denoiser isn't being used in the video.

Actually it does, the demo already uses Nvidia's RTX technology which is their denoiser module and damn do the specular reflections look ugly ... (one of the easiest effects to ray trace at high quality) 

"Please note that a ray-tracing denoiser module is coming to the GameWorks SDK, which will enable developers to remove film grain-like noise without any additional time-sapping development work, meaning the end result will look even better."
https://www.youtube.com/watch?v=jkhBlmKtEAk

"Remedy Entertainment’s NVIDIA RTX tech demo. Note: a ray-tracing denoiser module is coming to the GameWorks SDK, which will enable developers to remove film grain-like noise without any additional time-sapping development work"
https://www.geforce.com/whats-new/articles/nvidia-rtx-real-time-game-ray-tracing


Looks like there is demo from Epic now.
https://www.youtube.com/watch?v=J3ue35ago3Y

“Integrating NVIDIA RTX into our Northlight engine was a relatively straightforward exercise,” said Mikko Orrenmaa, technology team manager at Remedy Entertainment.

https://nvidianews.nvidia.com/news/nvidia-rtx-technology-realizes-dream-of-real-time-cinematic-rendering

The upcoming GameWorks SDK — which will support Volta and future generation GPU architectures — enable ray-traced area shadows, ray-traced glossy reflections and ray-traced ambient occlusion.

https://developer.nvidia.com/gameworks-ray-tracing

This is indeed the GameWorks SDK they were talking about running on the Titan V using denoising to "enable realtime ray tracing" like they said ...  

LOL. If Microsoft really refers to Raytracing and not calls something else Raytracing it is actually one of the oldest algorithms creating 3D-imagery. That's "The Future".

I remember back in the 90s we let our computers calculate for hours with POV-Ray, to get a pretty image. This one for instance is created by POV-Ray:

Well, this is also the basic problem with Raytracing: it needs way too much processing time. So games actually always used techniques that simplified it more, it looked worse than Raytracing, but not that much, and was WAAAAY faster. So, I don't really believe it will be used for gaming. It might look nicer in some scenes, but with oter methods you could just create way more polygons and keep real-time.

https://en.wikipedia.org/wiki/Ray_tracing_(graphics)