PlexPy implies video transcode down to 1280x720 - is that right?

I have a file which is MKV H264, 1080p, 1920x1080, 10000kbps, DTS audio. I'm streaming it locally to an XBox360. TV is HD and set to 1080p. XBox is set to maximum quality. And the image does look good.

But PlexPy says its transcoding both video and audio (which I expect). Only thing that makes me curious is that PlexPy says Video: Transcoding (h264)(1280x720).

Is it suggesting that somehow the 1920x1080 file is being compressed to 1280x720?

Submitted by gnartung | #Specialdealer Special Offer Online Shopping Store 2016