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No, it's not a placebo effect. That would be the case if it only added numbers to the fps counter and nothing else.
The input lag & stutters are the cons, but the pros are worth it on PC's which can't otherwise run the games at playable framerates.
Using tech to increase performance in any way is valid and smart, but some seem to think it's cheating or something. Old nerds like me are in awe of what AI can do now
Regarding input lag and stutters with frame gen, in Cyberpunk 2077 I don't notice this, but that game is pretty optimized now, I guess. Nvidia Reflex is designed to help with input lag, I believe, which CP77 also has.
On their website (CDPR) they mention at least 60 fps as a base frame rate for frame generation, though, or there will be issues.
Note that the article is from when FSR3 was introduced to the game, but this part is about frame generation:
https://support.cdprojektred.com/en/cyberpunk/pc/sp-technical/issue/2728/amd-fidelityfx-super-resolution-3
This just means the 30 series was about the last generation where raw throughput meant anything. Went from 3090's stacking SLI, to weak single cards focusing on imaginary frames. Maybe Nvidia will rethink their gimmicks by the 60 series.
More frames are coming from your monitor, so it's not placebo. If the frames were simply repeated twice, it would also still be easier on the eye. I think they do this with movies, which are still mainly shot in 24 fps (although they might also be using AI-generated frames by now).
But with the AI generating new images, it keeps the motion more fluid, and our eyes and brain are nice and relaxed
Anyway, no matter what you call it, it is what it is, and it works. I like it. AI algorithms are getting pretty incredible... Also a bit scary, of course...
The game has FSR3 and frame generation is part of that. These work on older Nvidia cards too.