Sounds like an iPhone release cycle, an ‘S’ model. It’s not much of a surprise if you follow the industry, Microsoft has also announced plans to treat the Xbox more like a personal computer.
This would mean incremental upgrades to the hardware (internal components) periodically. This isn’t completely unprecedented — both Microsoft and Sony have released stop-gap ‘new’ hardware to spike sales in the console cycle, through ‘Slim’ redesigns. Those were more aesthetic upgrades than anything; the body became thinner and sleeker but the internal components remained the same as the 1.0 hardware.
The Wall Street Journal report says the new upgraded PlayStation 4 will have the same games catalogue as the PlayStation 4 but it isn’t clear how the games would benefit would from the additional GPU and CPU enhancements. Any change in internals will cause some frictions for developers, who will have to dedicate additional engineering resources to optimise for the improvements provided by the better components. It did indicate that the new strategy is partly to account for the upcoming virtual reality headsets, which demand more compute power by their nature.
I also think that the move to minor, iterative hardware updates is also a counter to the world of smart devices. The graphics chips inside iPhone, iPad and Apple TV (arguably the closest competitor to traditional games consoles) are catching up quickly. If games console makers continued their old-style plans of elongated seven-year cycles, they would likely be surpassed by smartphones, tablets and set-top boxes before the next-generation flagship consoles came around.