We're talking about a GPU that will very likely cost more than $400, at least for the higher spec versions. Hence, it's high-end and entirely relevant. The 60% of the market (on Steam) that seems to mostly play lightweight titles doesn't need XeSS and won't get it. It's the high-end games that push hardware that need things like DLSS, FSR, and/or XeSS. Nvidia dominates the high-end, and even the mid-range (though not with RTX on mid-range). So, when a developer has a choice between:
A) Nvidia DLSS, catering to a large chunk of the potential audience
B) AMD FSR that works with everything but doesn't look quite as good
C) Intel XeSS, which may work with everything but comes from the company that has never made a successful dedicated GPU
...Which will the developer choose? If DLSS looks best and already covers most of your intended audience, it's not the wrong choice. FSR might be fine as well, XeSS is currently totally unproven, just like Intel's track record on GPUs. I do hope XeSS works well and gains traction and opens up the potential for non-RTX GPUs to get DLSS-like image quality and performance. I'm just skeptical that Intel will actually make that happen.
I disagree with some things:
1. $300-$400 is the new low end now and $500-$600+ is the middle tier now. Based on reality and not MSRP fairy tales that we will (probably) never see again. Next gen GPUs will be even more expensive, just wait and see.
So your definition of high end is wrong and not accurate anymore and frankly I'm amazed how you do not know/see this by now...
2. You say only high end needs DLSS/XeSS/FSR. Again wrong, so many called high end GPUs even today 3080/3090/6800XT/6900XT have issues playing at over 60fps Ultra + RT in 1080p (!) in a few games (sure there are more in which they do great, but some even now are barely playable), hence they do need those techniques to achieve smooth 60+ fps. That means the GPUs below them
absolutely need those DLSS-like features for 60fps. Again this is 1080p, not 4k.
People are so shortsighted, they really need to wake up and realize that if there are 2-3 games
TODAY that make a 3090 cry in 1080p Ultra + RT and forces it to use DLSS to have above 60fps, that means the games of tomorrow, next year and 2 years from now, made exclusively for NEXT gen, not cross-gen as we have them now, will destroy these $1000-$2000+ GPUs! So yeah, from 3080 to 3060 and the equivalent tiers from AMD and soon Intel, all of them at all resolutions will need DLSS or XeSS or FSR.
3. Something tells me this time Intel is not lying and the quality of XeSS is at least as good as DLSS 2.0. Maybe DLSS 2.2 still has a small edge on it, but I suspect it will be insignificant to matter. Intel is absolutely "forced" to make this tech as good as DLSS and as open as FSR if they want to breakthrough the GPU market and disrupt it, and I think they will.
Having now XeSS and FSR, DLSS will become less and less relevant to the point that if Jensen does not make it open source too, if will be a non-factor in 2 years time.