On your encoding settings, when you set the quality balance, you don't want to set it all the way to 10.
The lower the number, the better the video quality will look with extremely fast/high movement. The higher the number, the better the video quality will look with extremely slow/low movement. If you're doing like a first person shooter then a lower number will be fine like 4-5. If you're doing a platformer then a higher number like 7-8 will be okay. If you're doing a puzzle game then 9-10 will suffice.
If the quality balance is right for you then consider not downscaling your resolution if you do use a downscale or don't downscale as much.