Um ... it's not so much that people think that Sony is stuck in the middle-ground
Ok I will say something that here will not be so successful but that in my opinion is what it is
For many years Microsoft has been trying in various ways to become a "leader" in the videogame market and we know well that initially the "videogame" was simply an excuse in its race towards the control of the living room.
Tried (and trying)... with different results..from the OG xbox or GFWL to the x360 until the OG xbox one ( i think their most poor attempt)...
People should start to understand that for them (seen the different results of their effort..and since some have completely failed)....it is not so much a problem of money .. not for such large companies (we saw Apple lose 190 billions of market cap in just 5 weeks without batting an eyelid) but it becomes (a problem) when you fail to instill in the shareholders the necessary confidence to invest in that market instead of others....that trust that at the moment Nadella has conquered... and that now he pours in Spencer and in the gaming division. This does not want to be the usual post that talks about the "myth" of their money war-chest..but the simple rationalization that companies that differ in size ....can have at their "maximum" huge budget differences...
The acquisitions made by Ms and the release of a console like the X .. the investment in services such as xcloud and gamepass all in such short times.... make it clear how much Ms is ready at the moment to invest in the gaming division ... despite .... let's say clearly that this was not one of their best GEN...so much so that many thought (clearly say stupidly) that Ms was ready to "close" the division.
I do not think any other of the big 3 could have invested (money wise) what Microsoft is doing in such a short time now, especially during a generation that absolutely does not see it as a leader. (without even questioning the 2.5 billion dollars spent on minecraft in this gen)
We know that for Sony the gaming division in the last 10 years has become one of the most important ... this is due to the fact that they lost a lot of ground in other markets such as mobile phones or TV. In the same way we know that the billions lost during the PS3 era brought the sony really to its lowest level. And I do not think investors ever want to see Sony take so much risk in a console like they did with the PS3.Unfortunately at this moment I do not think that Sony could allow another generation like PS3 one without undergoing major changes in the division itself.
This is why I think that even if they will release an excellent console (as was, and is the PS4) I do not see them wanting to fight against MS a war of power ... especially considering 3 thing the balanced design that Cerny has accustomed us to (especially with the PRO )...the price point to which Sony seems to be aiming...and even more so when the CEO of the Microsoft division in front of everyone (betting his face at E3) has made it clear that they want to have the most powerful console again.
Of course anything can happen but I personally expect microsoft (as many others have said before me) will have the most powerful console the next gen
ps. and let me add this. the strength of the brand playstation can easily, on the contrary of the xbox, win a gen even without being the most powerful console
There's no reason to feel this wouldn't be a 'successful' thought because it's all rational. It's a reasonable theory as to why Microsoft may take a particular approach to the next generation.
I completely agree that Microsoft's gaming division, now with the full support of the board room, has the capability within it's own parameters, experience and partners to design and develop a very powerful console. There's no room for debate on that one. Microsoft have the resources to match anyone and recent acquisitions along with the bravado show the company is dead-serious about tackling the next-generation, both hardware and software. It's a show of power; a warning to Sony that they could make a proposal that will satiate the most ardent Sony supporter.
In isolation, from that perspective, Sony would probably not have an answer if money, time and budget is of no consequence to Microsoft. But it is, albeit relatively higher than Sony's.
Investing isn't just about how much you invest. It's also about how you invest. Although on paper you are right, the other big two wouldn't be able to complete financially, the trick would be to gain insight in design and technology to get an edge. This is something Cerny successfully did with PlayStation 4; being more powerful and cheaper than Microsoft's offering. History could repeat itself, especially since it's been rumoured that Sony has had a hand in the design process of new chips.
The other concession is if all the rumours are absolutely true I would have thought investing in known current architecture is self-limiting. For example, as you rightly noted, Sony's costs for PlayStation 3's CELL architecture would be over-inflated, even though it was a design developed with IBM and Toshiba, because it hadn't been done before. At this point I'd ask 'How much money can be thrown at a solution to push the limitations of current feasible technology?'. There's only so far Microsoft can go unless they play the waiting game and release a year or so after the PlayStation 5 when other technologies have been tested and certified.
Is the delay worth the wait?
I'm sure Sony has the resorces and capability to invest in pushing current technology as much as Microsoft. In that climate Sony are more than capable to the point where design and execution pays dividends i.e. PlayStation 4. The next-generation, an iterative step of the current generation, should make it even easier for Sony to flex design prowess versus cost. So, at this point, are they actually better suited for the task?
The PlayStation 3 was a confusing product. It cost Sony too much money but would Sony be who they are today without that mis-step? Think about it like this - Sony are just as clever at engineering a console but with current technological sensitivities in mind and PlayStation 3 solidified their 1st party offering. That mis-step has strengthened the whole brand.
To rap up: the talk of Microsoft running away in the power game seems a little daft right now. Execution could be just as important and the limiting factor of iterative technologies for the next generation could effectively stifle Microsoft's vast wealth. Or wait it out.