PS4 isn't in direct competition with Switch and neither will the PS5 be. They're too different and have minimal impact on each other. If you want an example of this PS4's peak year by far was the year Switch launched, clearly Switch didn't have a negative affect on it's sales despite having a strong start selling 13.5m that year.

Xbox/PS are in direct competition because the systems are very similar and the vast majority of software sold is multi-platform available on both and almost identical versions on both.

The direct competition between PS4/Switch is minimal because they appeal to different people as they have very different software libraries.

You are right that the PS4 isn't in direct competition with the Switch.  However the PS5 is in direct competition with the Switch.  The PS5 and Switch have more in common than the PS3 and Wii.  And yet PS3 sales were stagnating whenever the Wii was selling well.

If the Wii can affect the PS3's sales, then you can be sure that the Switch will definitely eat into PS5 sales.

I see zero chance that MS releases a $500 Xbox, unless they have more than one SKU.  In that case, there might be something at $500, if there's another one cheaper. They just saw how that $500 price tag affected sales at the beginning of this generation. inflation, at least in the dollar, has been relatively low. So that $500 is still $500. If they make that same mistake again, that would be one of the stupidest moves in the history of business.

Similarly, I see zero chance that they really say less powerful console than Sony, unless they truly are caught off guard. That's another mistake they just made, and certainly will have learned from. they have extremely deep pockets, and have  shown lately that they are willing to spend and do intend to be a player in the gaming space. If anything, I expect them to be willing to take a hefty loss on console sales if necessary, in order to stay ahead of Sony in the next generation. Microsoft has a lot more ability to sustain losses for a long time if necessary, if they have a long-term goal in mind.  It looks to me that they are pulling out all the stops to compete.

There is always a possibility that these are co-releases.  Although GoT and TLOU2 had such good graphics that I would not be surprised if they were planning on making these PS5 games all along.

My thinking based on the rumor, is tease PS5 before e3, and see if you can force MS to make a move or spill the beans at E3 like they did before, then hold a massive 25th anniversary PSX PS5 reveal event to be remembered. Whether it launches soon after, or early 2020, doesn't really matter, as long as the price is right. A $399-$499 PS5 shouldn't hinder a $199 PS4 much at all.

I disagree that Wii had anything to do with PS3's sales either. That was entirely down to the pricetag, hardware and the Xbox 360.

Also why is PS5 in direct competition if PS4 is not? What is going to make the PS5 appeal to the same people as the Switch, while the PS4 appeals to a different group. I very much doubt the PS5 is going to be different from the PS4 in any major way, it's just going to be the same thing with more power.

Switch is not going to eat into PS5 sales, just as it hasn't eaten into PS4 sales.

Actually I don't see any of the two releasing for 400 next gen. The high prices of mid-gen consoles alone make that kind of unlikely. As Amy has already said, considering both consoles will be backwards compatible, I see both releasing at 500 price point and still selling at a loss, considering the prices of the new components in comparison to the mid gen components. 

Considering the power...both consoles will be able to do 4K/30 easily, even 4K/60 for some games....I don't see how a power difference would greatly benefit anyone of the two unless it's a drastic difference. Most people will even still be on 1080p TV's next gen. A few TF more or less are not going to make much of a difference.

Who has ever stated 2018?