This is all wrapped up into a dynamic LOD system which they talk about in the tech preview of the Unreal5 engine here https://youtu.be/d1ZnM7CH-v4?t=410 at 6:50 where assets are loaded/unloaded as necessary.
Nanite uses a dynamic LOD system that aggressively adjusts the quality of the assets given your distance from them. I was learning about this recently, there's a good breakdown of how cluster culling works here with an awesome visual illustration of what is going on https://youtu.be/P65cADzsP8Q?t=98 at 1:38
We also know that for the PS5s super fast custom drive they actually overhauled the I/O for the engine because it was basically old and limited, and so that'll be something they look to push on the PC through DirectStorage to make streaming that content faster and so more seamless. The faster you can do it the more tight you can be with with the LODs.
People believe that this will reduce the amount of textures that are buffered before use. That it will stop large amounts of texture simply being stored in memory. Even if that is true developers can simply use whatever new resources they have. If some cards have 16GB or 24GB. Then they can add higher resolution textures to the game. How much this improves image quality is another question. The truth is the game has to work on the most common gpu's at the end of the day which means 10GB is enough in the same way 8GB is enough.
Windows 11 is quite nice, but TPM is a requirement. Many will still be on Windows 10 were there is no DirectStorage support. PC's will also have lots of different NVMe drive with different performance characteristics. Developers most likely will have to make the new games run of the most common hardware. This likely means no DirectStorage support, except at the high end. Very few people have the latest and greatest hardware.
Only a possible problem if you have a 4k monitor though. It will still be a niche monitor in a few years time. 1080p is still the king. So only an issue for a minority ?
For RT most people will have a NVIDIA GeForce RTX 2060 if stream hardware survey is to be believed. Only 6GB of vram and we are worrying about 10GB being enough. RTX 2060 is great at 1080p. https://store.steampowered.com/hwsurvey/videocard/
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