Because the rendering engine and assets are being worked on as the game progress. It’s not like they do them up front and then just stop years before release.
I’d also like to point out that game assets aren’t made at the quality that you see in game. They’re often made at a higher quality and then that quality is toned down as appropriate for various graphics settings. It’s actually not hard to make a 3D model of a character that has millions of polygons or 16k textures if that’s the only thing in a scene even though that would be unrealistic to see in a video game where you have thousands of other things to be concerned about.
Part of this is that the people working on the game have a rough idea of what to plan for to make impressive graphics that are beyond current standards, and are able to keep that in mind when making the game. Like, if you know that your game isn’t going to come out for a while, you can plan for really impressive graphics that you’ll keep working and refining as the game develops, with the knowledge that near the end of production you can adjust them as needed.
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