There's no doubt about it, the recent UE5 demo for PS5 was a stroke of genius in terms of selling the graphical power of Sony's next gen machine.
The ball in MS's court now; they need to show Xbox Series X can produce results just as impressive. The recent gameplay event didn't quite cut it in this regard; nothing shown there looked even close to the UE5 showcase.
The run up to a generation is where a lot of narrative surrounding consoles is established; we saw this with the current generation where Xbox One's status as the less desirable machine was cemented before it even hit shelves, and no amount of backtracking ever quite repaired the damage.
Right now, Sony is establishing the narrative, as they have in previous generations, that Playstation is the top dog in graphics, the place to be for the best looking games. MS can either sit back and let them dictate the narrative, or they can challenge it.
"In-engine" cinematic stuff isn't going to do the trick; gamers have wised up to the fact that these can be faked. The reason the UE5 demo worked so well was that it was presented as gameplay. Whatever the best looking game MS have up their sleeve at the moment, they should put together a gameplay showcase for it. Show what their new system can do and why people who care about visuals shouldn't just get a PS5 instead.
Worst part for them is that they can't really show UE5 (not even because of possible agreement from Sony and Epic) but because it would just be a "we can do it to" (and they already done that on tweeter and no result), and they need to show even prettier games than Sony if not their power advantage will look needless for most customers and if they are more expensive that will only hurt more.
duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"
Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"
Azzanation: "PS5 wouldn't sold out at launch without scalpers."