Good news and progress, AMD! However, while I appreciate the frame generation improvements, what AMD really needs to focus on are improvements that improve native ray tracing and path tracing. They are so far behind Nvidia on that, it's almost like AMD isn't even serious about making graphics cards.
I have an Nvidia 30 series in my PC, but mostly game on Xbox Series X. FSR 3.1 will help with the Xbox, but the only real solution to the biggest problems requires new hardware. Hopefully, if AMD is still making the graphics hardware for the Xbox when the Series sequel comes out, they will have at least caught up to the current 4070 on ray tracing power, and hopefully, be beyond that.
Path tracing and ray tracing provide massive impact to how a scene looks and, if the hardware to do it becomes ubiquitous enough (meaning available in cards no more than $200, and ideally down to $100, then it also takes a HUGE burden off of developers who spend thousands of hours during development to bake in artificial lighting solutions, just to create an illusion that's not quite as good as ray tracing. They'll have to continue to do that as long as they know a sizeable portion of gamers will be playing on hardware that doesn't support ray tracing. But once that critical mass is reached, they can just drop that dev effort and put their time into other more important areas, yielding faster development and/or better games.