Unless PS4 production is limited by covid/ps5 release. Tunning down production of it is a mistake IMO. They can still make a decent profit from PS4 sales, and they have new games coming out on PS4, from both first and third party.People won't be buying PS4's to play Horizon 2 in 2021. The transition thing is more about people who already have a PS4 but aren't ready to jump to PS5 yet.
They said they expect ps4 to ps5 transition to take 3 years. Then they shouldn't shoot ps5 in the leg. Doesn't make sense to release horizon on ps4 if ps4 production is gimped for a full year before.
I think I've said this before but anybody who buys a PS4 now is a low priority customer for Sony, because they are unlikely to spend a lot of money in the ecosystem. With their continued hesistance to cut the PS4's price even below $300 outside of specific sales, they have shown that there is less of a focus on getting even the last potential customer to pick up a PS4 even if they might only buy a couple used games (or tries to pirate them or whatever).
Just like with the PS3 after the PS4 came out, I expect PS4 sales to grind to a screeching halt within the next 6 months outside of maybe emerging markets where income is lower. US and Europe we can get used to numbers like this.