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You selected the issue: Lower streaming resolution

Adjust your streaming resolution from the Steam Link main menu, or live in Big Picture Mode and in-game.

Steam Link main menu:
  1. Select Settings
  2. Select Streaming
  3. Press the (Y) button to enter Advanced Client Options
  4. Set the Resolution Limit option to 1280x720 (720p)

Big Picture Mode:
  1. Select the settings icon next to the power icon in the upper right
  2. Select In-Home Streaming
  3. Select Advanced Client Options
  4. Set the Limit resolution option to 1280x720 (720p)