Everyone should just keep in mind the first look at Unreal Engine 4 all those years ago before getting too too excited. Big step forward, absolutely, but it won't be as seen here.
In the video they said it was running on a PlayStation 5. There was a section in the demo where they had interactive gamepad controls so it appears it might have actually been running real-time on a PS5?
I never thought I would be saying this but storage might actually end up being a bigger issue than CPU/GPU performance. The new MS Flight Simulator has to stream the world over the internet because the entire map is 10 petabytes. In the UE5 video they said the demo scene was 13 or 16 billion triangles... I imagine that will take up a huge amount of disk space.
Modern AAA games are already 50-150 gigabytes each, and this is only going to grow as models and scenes become increasingly detailed.
Edit: finding holes in their demo - this may be a video compression artifact, but the big open scene at the end appeared to be of much lower quality. This is something current AMD GPUs can do where if you move around it dynamically lowers the resolution to prevent FPS from decreasing. Perhaps they also dynamically lower resolution in the big open areas? IDK how much of a benefit that would make, but you can never trust these marketing videos...
You can be sure that demos like that (especially early ones) make tons of compromises that are neatly hidden on the video but that usually wouldn't be viable in context of a regular video game - at least without severely limiting your game design choices.
When it comes to animation the interesting stuff were the "automated" hand/foot placement animations like the hand on the door they mentioned.
(Just a reminder, this was back when Fortnite was not a Battle Royale game, and nobody in the world knew about the it. That game was in development / early access for ages before it became the biggest thing in the world.)
A lot of it actually looks subpar 2020 standards.