The reason for a company to offer an upgrade is very simple- to make more money.

Both MS and Sony know that there is a section of their consumer base interested in the latest new tech. Targeting these consumers extends beyond just console upgrades. There's been a noticeable increase in the focus on high end peripherals as well, controllers, headsets etc.

A mid gen upgrade allows them to bridge the gap between generations and ultimately make more profit on hardware.

In particular this generation the focus was on 4k. Next generation it may be something else entirely. 

It is all about the money. You are right. Just like paying for online is all about the money. Just like microtransactions are all about the money. 

If all about the money was a good excuse, then every gamer would be happy..

He explained why companies do that, you asked it.

About why customers buys, it is because customers would see value on the product/service.

In free market companies see the margin between price and cost to see if it is enough to ensure supply. Customers see the margin between price and perceived value and see if it is enough to ensure demand. When Company have price enough above cost, and customer see value enough above price both agree to exchange.

True and what is the least selling PS4 model? The PS4 Pro. Im just not sure making a few bucks on that is worth making more gamers annoyed. 

The PS4 is a great console and games like God Of War and The Last Of Us Part 2 to name a few shows what the console can still do. I personally think the PS4 would still be at 100 million+ without the Pro. And the leap to the PS5 would be much more impressive.

They are selling 125-130M PS4 and would probably not even reach 120M without the Pro, so not sure this "annoying gamers" really is something real. It is as relevant as removing Linux from PS3, we had a vocal minority complaining about it, but in the market itself it only helped sell more consoles.

The leap of PS5 will be very much impressive, the Pro only brough more pixel, and IQ is much more than that. We will see tomorrow. And exactly by looking games like GoW and TLOU2 you'll see there is no reason for gamers to be annoyed by the Pro existence and also that it doesn't take from the impression on the PS5 (the only point it takes away is on spec sheet, but on games it won't be impacted).

Well I don't see a reason for them. Must be other more consumer friendly ways to make money. Ive never been too into the power of a console, so maybe this is way above my head, but I just don't get the smaller updates of a mid gen upgraded console. If a gamer is so into that, then they would play their games on the PC. A constantly evolving platform. The PS2 never had an upgrade. Neither did the Wii or 360 or PS3. Yet all of them outsold the XB1. 

Ask people why the PS4 outsold the XB1, no one is going to say its because the PS4 Pro. It was outselling it long before that. Its about the games. I just don't get the fix what isn't broken practice, just so we can make a few more bucks.

Power hasn't been a big factor in a console since the 90s.

There isn't much reason for them even if I have bought.

The point isn't to sell more HW, it is to sell more SW, and if making the mid-gen upgrades (possibly they were expecting sales to slow down because of the discrepancy against PC and Slim not being so much smaller anymore) they can increase SW sales they would do it.

Companies try to please as many customers as possible and hardly you'll see a single model sold by a company in any market, so midgen upgrade is still a easy to see baseline, easy to use, and ensure every game will work fine so going to PC doesn't replace that.

Sometimes we just have to accept that practices we think are bad (like paid multiplayer) is acceptable or even desired by majority of market and companies will go after it either totally or as part of their business.

Well I don't see a reason for them. Must be other more consumer friendly ways to make money. Ive never been too into the power of a console, so maybe this is way above my head, but I just don't get the smaller updates of a mid gen upgraded console. If a gamer is so into that, then they would play their games on the PC. A constantly evolving platform. The PS2 never had an upgrade. Neither did the Wii or 360 or PS3. Yet all of them outsold the XB1. 

Ask people why the PS4 outsold the XB1, no one is going to say its because the PS4 Pro. It was outselling it long before that. Its about the games. I just don't get the fix what isn't broken practice, just so we can make a few more bucks.

Power hasn't been a big factor in a console since the 90s.

A few bucks?

(If we go with 1 in 4 PS4's since Pro launch) that equates to roughly somewhere in the region of an additional $1.475 billion in hardware revenue.

How do you calculate that? How much does Sony make per PS4 Pro sold?