RTX 5070 or RX 9070 XT for game development?

If Blender rendering is a big part of your work, I'd lean toward the 5070. Its OptiX renderer can be substantially faster in Cycles, and CUDA support may matter for other tools or plugins in your workflow.

That doesn't mean it's faster at every development task. Check the specific renderer and tools you use, and keep the 12 GB VRAM limit in mind for large scenes.

I'd pick the 9070 XT if most of the time is spent working in Unreal and playing games. It generally has stronger gaming performance than the 5070, and some Unreal benchmarks put it ahead too. It also has 16 GB of VRAM rather than 12 GB, which gives you more room for textures and larger scenes.

The tradeoff is Blender rendering speed. Look at benchmarks for the Unreal tasks you actually care about rather than assuming the faster gaming card wins every editor workload.

Check your projects and plugins before buying. If any of your tools specifically require CUDA, that points to Nvidia. If they don't, compare the time you spend rendering in Blender against the value of more VRAM and better gaming performance on the AMD card.

For the gaming side, DLSS versus FSR might matter if you have a clear preference, but look at comparisons in the games and resolutions you use. Quality can differ by game and implementation. I wouldn't treat either card as a guaranteed problem-free choice based on old driver stories alone.