This is absolutely mind blowing. What you'll see is done using a new micropolygon system called Nanite and a global dynamic lightning system called Lumen in addition to fantastic sound and physics models that have already been available in Unreal Engine 4.25. This demo runs on a Playstation 5.
I have never been a gamer since I had Commodore 64 as a kid and I'm not about to become one. But I'm really not too surprised if more and more of people get lost in virtual worlds if they look and sound as great as this. Admiral Ackbar once put succinctly what this is. But if machine intelligence will ultimately render most or even all of us useless, then I think something like this will be a smaller evil compared to chemically induced virtual realities or crime.