If I recall correctly didn't they want to steal some of that PC market by releasing midgen upgrades
In my mind:
They made the 4pro a long time ago, things change, New Strategies. The landscape has changed, we've had virtually no new console entrants since Sega left. Ouya doesn't count. Handhelds largely cut back, Nintendo has this hybrid device.
But in the same time, we've had
a) EGS
b) EA Origins
c) Ubisoft Store
d) Humble
e) Xbox/MS Store
f) Green Man Gaming
g) Stadia store
+ 2 services that provide unlimited rental gaming (EA Access + Game Pass PC)
We're getting a lot of movement in the store and services area. They are cheap to make, cheap to fund, and they are actually what generates profits.
In contrast, hardware is actually super expensive to market, build, design, support, maintain, distribute, channel. And a single mistake is costly because it impacts your store profits (see Xbox One, see Kinect).
If you move to hardware agnostic, you put the pressure of delivering hardware on 3rd Party vendors. You don't need to deal with supporting nvidia, intel, amd. You don't need to deal with Apple, or Android devices. You don't have this freakish amount of up front costs every 7 years. You just sell the content that they want.
Companies are becoming increasingly aware that carbon footprint is going to cost them eventually, the ramp up for carbon costs are going up. You can't be asking people to buy 2 consoles just because you refuse to release software on 1 of them. Eventually the costs of carbon will start hitting electronic hardware somewhere in the chain. These cheap prices aren't going to be around for much longer. And cloud computing surpasses anything that can be done locally, the only issue comes down to latency.
We still have movie theatres but a majority of people are happy to consume their content on streaming services in the comfort of their home. That's what I think this pivot is. Sony will stick around the console side and still try to win, but they need a foot in other vectors. Less they want their competitors to claim that entire market for themselves. part of it is having to open up the walled garden to succeed.
I think a big part that companies consider which most people don't is that there is a finite amount of time available for everyone. As much as they are fighting for your wallet, they have to also fight for your time. If stepping into the xbox ecosystem (PC or console) gives you access to enough titles to fill your time for the year, will you think about bothering with PlayStation and Nintendo games too?
They need to respond. I know a lot of people don't think Sony won't release exclusives day 1. PC players are (a) patient since they've never had them before and (b) their competitors are offering enough titles to keep them busy anyway. So it's MS that is getting the extra $$$ by releasing exclusives day 1. Sony isn't getting anything by holding the exclusives back 3 years. And if they come out 3 years after, will they actually get any relevant sales?
Next gen is going to be a new landscape. Players will have access to more games, consumed in a variety of different payment methods, on the device that they want to consume it on. I can't possibly see how sticking with the OG strategy is going to last a whole another generation.