I believe this can happen when YouTube doesn't detect hardware playback capabilities right. It gets stuck in mp4 mode which is often limited to 720p.

My Steam Deck will play 4k60 video just fine so this seems to be a problem specifically on your end. YouTube will let you play videos of higher resolution than your screen offers regardless of you device (something I use often to get decent 1080p video out of the compressed trash YouTube pushes, by selecting 1440p or 4k on my 1080 devices).

Possible fixes I can think of:

• Try disabling all addons (yes, including adblock) to see if an addon is causing this. Works fine for me with uBlock, but who knows
• Try resetting your Firefox profile. Sometimes a weird setting can break browsers in spectacular ways.
• You're probably using Flatpak for Firefox. You may need to enable hardware acceleration in a tool like Flatseal for high performance video playback.

i use Freetube on my deck which you can set the default video resolution to 1080. works well in gamemode.

Welcome to the conversation.

Not to be snarky, but welcome to the true frustrations against corporations. They view linux users (like you now) as pirating monsters, and in their eyes giving us even 1080 means that they're giving their content over to pirates. Which is ironic because I think that sort of behavior encourages pirating.

So it's nothing you did, nothing is broken, it's functioning as Netflix wants it to. It'll be the same with all of the other providers.

I've got a legion go with Bazzite installed and now I'm curious. I'll boot into windows after I boot into Bazzite and see if there's a difference. At least then you'll know if it's Linux or YouTube.

Edit: So for me (granted I'm not on a steam deck but on steam OS for another handheld), it defaults to 720p but I'm using Firefox in desktop mode, and I have the option to change it to 1080p but only if I use a mouse to have over the video and select settings from the progress bar.

In windows (on the same device) it works just fine, and I can do 1080p premium on Firefox from windows 11. So it may be something stupid like needing to use the track pad, or it may be how you're using Firefox in steam OS (as an app inside steam or some other way).

Edit edit: Randomly the sound quality is quieter in Bazzite (receiver and speakers set to the same volume level) than in windows, by a significant margin.

If Google search to see if is a Linux thing. Sometimes streaming sites limit resolution on Linux for some reason.