It's going to be hell for budget gamers for sure. The other shoe will drop when developers get really lazy with optimization for lower end hardware. It's already starting with RDR2. When a new console comes out anything that is a notch above or lower than the console equivalent GPU/CPU is considered low end and ends up in this low-medium PC hell with a wide variety of different configurations.
The big thing is what will happen with Ray tracing.
Imagine if every next gen console game has ray tracing, but you need a $600 Navi card in order to do the same thing on the PC and Nvidia's ray tracing cores are only sparsely being used by developers. We know they are already doing ray tracing in console games, but for some reason those same developers aren't using Nvidia's ray tracing cores for some reason.
They meant that Microsoft wouldn't have any exclusives. Third party developers will make good use of the 8 cores and 16 threads once they no longer have to worry about lower tier CPUs.
You don't need 1st party developers to squeeze every last drop of power out of a console like with past generations. Just like Havok was a standard that was widely adopted and in every game Femfx will work the same way. Next gen physics will be standard across the board. Developers will have PS5 games to show off with next gen physics in a couple weeks.
Right now we have a lot of games designed to run on 4 cores because the 8 core Xbox One and PS4 were running at half frequency. When you get real 8 cores and 16 threads on top of that it will be a game changer.
You made at statement about how impactful it was for the PS4 to have more power than the Xbox one did last gen. I said I didn't think it would matter all that much at 4k. It was a bigger difference when some Xbox games had to render at 900p from 1080p, but I think even if the PS4 was the weaker console that it wouldn't have mattered, and the difference in exclusives is the reason I gave.