You are grossly overestimating what PS5 can do in regards of 4k, let alone 8k (which nowadays is used by very small percentage of enthusiasts). 4k native is not something most of the modern releases target on PS5, perhaps in some specific moments when the resolution is dynamic and not much is happening on the screen. Or if you're playing at a locked 30 FPS, which is a major tradeoff.
Not disagreeing with you that many heavy PS5 games rely on dynamic resolution to hit a good frame rate. And for some people, that's enough reason to upgrade. They want they best available no matter what.
But my point is that a holding a solid 4k vs dropping down from 4k to 2k upscaled when the action ramps up is barely visible to most people sitting 6 feet from a TV. It's diminishing returns. And what does 8k bring if you don't have a 200in tv? Can you even see the difference?
Digital cameras went through a similar cycle. Since about 2008, high-end digital cameras have been good enough that the pictures from them still look great when produced by a good photographer. There has been a lot of sensor improvement since then around dynamic range, etc, but it is not super obvious in a sales demo. Digital camera sales have totally fallen off a cliff and now what sells now is software improvements on cell phones that make it easier to take good pictures with no thought, not drastic hardware improvements.
I think that consoles are starting to hit a point where they are powerful enough for the kinds of games that we currently have the resources to build. Making the graphics even "better" requires an enormous development investment that only pays off for the few most popular blockbuster games. It's hard for a console maker to find compelling demonstrations of why they need more power right now.
Like with cameras, miniaturization and new form factors is really interesting. Nintendo is killing it with the Switch despite the dinosaur hardware. It's a lot easier for them to demo improvements for a Switch 2 because the Switch isn't at the point of "good enough" yet for many types of games.
Of course computers will get more powerful and console development isn't done forever or anything like that. But it feels like the hardware is currently a bit ahead of the software maybe for the first time in history which makes the value of a upgrade tenuous for many consumers.
I agree with your point re people not even noticing. There are so many titles with jaw-dropping visuals on PS5 and it's hard to complain. But the numbers are numbers - PS5 isn't suited for 4k native gaming and it's not even close. Perhaps with the new upscaling? I don't know. I've RTX 4090 that is leagues ahead of PS5 and there are games that reach its limits in 4k (see Alan Wake 2 - a great game btw, or Black Myth Wukong).
It also boils down to the software part - sadly a lot of games are badly optimized due to laziness. UE5 is getting popular and games made with it have already demonstrated that PS5 may struggle with them. I believe over time PS5 Pro will become the baseline for optimization, leading to more frustrated PS5 owners wanting to upgrade.
Speaking of handhelds, Steamdeck is also mind-blowing good.
