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The story (maybe) is this:

"Sony talked with many big studios and obviuosly with Epic developers prior to design the PS5.

What they answered was to have more CPU / GPU power and more and faster RAM for the next gen, that's for sure.

Then Sony asked to Epic engineers on what they were planning with their next-gen UE iteration, the UE5, and they explained they were working on new advanced techincs for streaming huge quantities of data (models with millions of polygons, 8k textures) and push them on screen at the fastest possible speed, because that was the only solution for recreating vast, realistic and immersive world with huge details on screen.

So Sony took notes and designed the new console with custom hardware, the fastest SSD, inluding priorities and other optimizations, in order to meet the next-gen engines requirements and expectations.

And now we have it (almost :D), a console capable of rendering spectacular graphics continuosly streamed from its peculiar storage system."

Oh, while not being a main feature of the tech demo, I suppose they were using the Tempest engine for all the enviromental sound effects, such as all the realistic cracking sounds coming from rolling stones and falling rocks.

From what we know so far, Microsoft was more conservative with the new XSex, just pushing hardware specs and not focusing much on this new features.

-Epic just said this demo won't run as is on XSex.

-Windows Central Gaming deleted their tweet after they got confirmation that the demo can't run on Xbox Series X because it doesnt have Ultra Fast Speed SSD like on PlayStation 5.