As title, could the fact AMD is now focusing on mid-range cards at more "reasonable" price and Nvidia becoming more "premium" and out of scope of affordability for many in the higher end, as well as Nvidia focusing on A.I, could this create more demand on mid-range cards, lower performance improvements and as such mean to ensure progression as far as graphical quality goes there may be a need to focus on optimizing games more, and potentially be even more reliant on DLSS/FG (But that can only go so far).
I think it really depends on price/performance vs needs.
If AMD can as rumours suggest release a 4080 equivalent at the $400-$600 range... and i mean actually available at $400. That will meet the needs of lets say a made up figure of 99% of the market, UNLESS you have a 144hz+ 4k monitor there's no real need to go above that for a card.
It's not a "bad" shout from AMD so to speak, as a card of the 4080 performance will meet the needs of 1080p and 1440p for years to come.
The problem we have is... well... it's AMD.... they will shoot themselves in the foot and probably focus on the 600 price range which AIBs will sell for 700+, and Nvidia will just release a 5070 at the same or if not better performance to the 4080 at a price that makes upselling to the new 5080 worth it as you're not in the high price market again.
Unless AMD actually hits the $400 mark (which we know sub $300 is the mass market lets say sub $400 for the current world events and general inflation over the last years) then it's just going to be another fart in the wind. The problem you have is Nvidia has won marketing, they can sell you a card with 10% less performance at 20% higher price and people will pay the money because it's "Nvidia" that's the state AMD have got themselves in by trying to match the Nvidia price points.
Honestly if AMD has any hope in the GPU market they need to copy their CPU Market.
When Ryzen Gen 1 launched yes it was no where near Intel in performance but they sold their top tier at under 50% the price of the competition, since then AMDs top tier CPU is still cheaper than Intel and better as such the perform really well in sales.
With Intel now entering the GPU market AMD have some serious troubles coming if Intels Gen 2 GPUs perform as people hope, they will undercut the hell out of competition to get the market share or I at least expect them to that leaves AMD in this middle void, neither competing in the high end or the lower end, trying to scavenge up any sales on this weird middle area where people have more money to spend than the entry cards but not enough to pay Nvidia GPU tax.
To summarise I genuinely believe they should aim for market share over performance and try and hit that entry level $400 price point with insane performance. The middle ground wont help with in the current economic situation and they wont compete at the top, so just go mad at the lower price range, it will at least make Nvidias prices look even more ridiculous.