I had this same issue with TSW3. For weeks with that game using PC Game Pass I had my screen settings set to a 4k resolution but it never looked right. My first tipoff was the fact that the app I use to measure framerate and other info displayed in a much bigger font than usual. I put up with it thinking I was crazy. Then I decided to purchase the Steam version of TSW3 and immediately I noticed everything looked like it was supposed to at 4k. The menus and graphics were noticeably sharper. Sure enough, now that I'm trying the Game Pass version of TSW4 I have the same issue. Has anyone dealt with this? All I can do to compensate is set the screen percentage to be higher. I have Windows 11, a 4K monitor, and an RTX 3080 GPU if that matters.
It's on Gamepass I think for just this weekend. But you could buy it from the Xbox Game Store since it was released, that is the version I'm talking about. One thing I realized is I can't set the screen settings to fullscreen, only borderless window. But usually that's not an issue in games. Also someone seems to have my same issue here, but some of the posts were deleted: https://www.reddit.com/r/trainsimworld/comments/x7gc90/screen_resolution_issue/
It was the higher DPI settings many people use in Windows that the game was going by. Thanks to people in other forums for figuring this out.
