They use what they have at their disposal at the time, with components that can be upgraded later.
In its simplest terms, you make 4k 120fps assets from the start, (masters) and downscale them for the game. Sort of like turning the graphics settings to low. If new tech came out during development you can just keep them closer to the master. Remember how Crysis came out before pcs that could play it at full res cam out?
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