Blurry video when scaling down width and height

Hey all.

I need to make a video which is 250x250px for a website. I've used quicktime to capture the video and made the capture area 500x500px so that I could capture the details of the screen I need to and so that I get a 2x file size for retina screens. The resulting video comes out at 1000x1000 due to it being recorded on a retina screen. so I need to scale it back down to 500x500px.

When I change the width and height in the basic settings then the video isn't as sharp as the original, neither in the preview or the exported filed.

I haven't done much with video before so maybe I'm missing something obvious here. Can anyone help me out?