The new feature is introduced in a system software beta available to invited users today, which Sony expects to roll out to everyone "later this year."
Although most modern TV sets have 1080p or 4K resolutions, compatibility with 1440p (also known as QHD) is popular for gaming PC monitors. These provide features like VRR, that PS5 owners will be happy to finally use to their full ability.
Games that support 1440p will display at native resolution, while games that display at 4K will supersample down to 1440p for a smoother image.
The upgrade when it finally becomes available will put the fear of god into Microsoft. While both consoles have similar specs, Vole has always had the advantage by providing 1440p.