They are trying to convince the industry that they are going to use the existing PS4 base to it's fullest so that everyone stays committed to Sony, but yes this will play out like a slow conversion of the existing playerbase rather than an expansion most likely.

This.... Is actually somewhat of a smart move, especially considering Japan.
With the switch out I don't think they have a good shot at maintaining install base if the ps5 was a traditional next gen. But with this Japanese developers would be happy to keep selling on the existing PS4 install base.
Of course, this is a double edged sword, meaning that most JP devs would stay developing at PS4 slim power levels. And at that point, just a bit of optimization and you can make a switch port to sell on it's bigger install base.

Fixed camera angles and tank controls are a thing of the past. Get over it...

The rumors for Lockhart tend to be a $299-$349 launch price. Officially pricing Pro at $349 by then could work, depending on the Lockhart specs, as long as they are similar on paper. That way you would have a $199 PS4, $349 Pro, and $499 PS5. All consoles being separated by $150 gap. Depending on Lockhart, they may want Pro down to $299 and profitable, which could be a 7nm slim model for E3 2020, out before the PS5 during the holidays. This may help to stay below the Lockhart launch price, and would also make PS5 look like more of a leap with a $200 price gap. Then again, PS could just go with another 2.3X increase and land just below 10TF, possibly hitting $399 for PS5, making an even $100 between all consoles. This should allow PS to hold those prices for the next 2-3 years without changing the hardware at all.

With the mention that PS doesn't seem to feel the transition to PS5 will be as fast as PS4, do we take that as meaning the PS5 will be $499 and so the price won't be that attractive, or possibly that the hardware jump (in TF) won't be as substantial as some may hope or want, and so they won't feel the need to upgrade from Pro for slightly better res and faster load times? If only 1 in 5 PS4's sold is a Pro, PS may assume a $399 PS5, considering it will be seen as another upgrade and not a new gen since it'll be heavily tied to the PS4 ecosystem, may not see the same kind of sales PS4 did. Not to mention years of cross gen games. Maybe PS5 exclusives won't be ready for a couple years after it's launch, also leading to slower sales at launch?

There is also Lockhart at 4TF to really take into account. If MS really ditches XB1X at 6TF, and launches Lockhart at 4TF instead, what does that say to PS about launching a $500 power crown console that get's dropped just 2-3 years later? It would solidify that Pro at 4.2TF was the better choice, which launched at $399, so maybe PS will stick to their $399 premium labelled console. Focus on CPU, built in VR, SSD loading speeds, and if that means a 9TF GPU then so be it. You will get some PS4 and Pro owners to upgrade, but as long as they are still buying the cross gen games, who really cares, as long as they aren't leaving for XB.

Tank controls? You're playing some weird FF games, my friend. 

I wasnt talking about FF specifically. 

And im not your friend, buddy.

Amazing move by sony

It all depends on how strong Sony wants ps5 sales to be, I reckon. Your price strategy seems to me that it'd make ps5 first year sales to be quite slow.

Not really. There are people who bought PS4 in the first year or two. They are ready for next gen and wouldn't buy a PS4 over a PS5, regardless of how cheap the PS4 gets. These will make up the vast majority of PS5's early sales. The cheaper PS4 SKUs will be for budget gamers who wouldn't buy the PS5 til it also hits $199-$299, anyway.

I see, but with 3 playstations out, wouldn't be possible that devs would release ps5 games also for ps4 and ps4 pro and as a result keep even some ps4 early adopters unconvinced that they should upgrade?