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UE5 was not actual gameplay footage for PS5 and it was running 1440p 30 fps. While the tech is nice and impressive, it's going to be used by both next-gen console.
Microsoft is going to be the leader in graphics next-gen, but that's not what really matters. Let's not forget the past generation. Microsoft only needs to focus on one thing Games Games Games.

I really like the approach that Microsoft is taking and it's really putting themself apart from Sony. Back capability, Smart delivery, and expending the Xbox brand to streaming everywhere is much more important to moving the platform forward then focus on graphics. The more user and making it much easier to join is going to result in many more games coming to the platform.

Microsoft rather than pushing for better graphics should double down on performance. They should request that AC Vahlalla support a lock 60 fps mode, this focus on performance goes a long way to gather the support of hardcore gamers. Microsoft's new focus on performance and low latency are again putting them apart from Sony's approach.

I think OP of this thread got it all wrong, Microsoft should focus on offering features that make then stand out as their own platform and not try to copy Sony.
Focus needs to be on quick resume, game pass, play anywhere, accessasibility and supporting all of Xbox consoles rather than forcing everyone to upgrade to next-gen now.
This really set Microsoft apart from Sony, while some hardcore won't appreciate the move compare to Sony's, it's super appealing to the casual gamers. Microsoft is also not alienating their hardcore audience with all the power they go packed in the Xbox Series X. I think Microsoft is really on to something especially if they release the Xbox Series S (Lockhart). The future of gaming isn't 4k 60 fps but rather 1080p 60 fps and the ability to play anywhere you want. You can own the Xbox Series X at home and enjoy having much better graphic. But, having the ability to play your game anywhere on any device for no extra costs at 1080P is going to be amazing.