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The splash screen uses PNG files. Just make sure the resolution is equal to your TV, or you may get a distorted/pixelated image.

Then you can drop the file into /home/pi/RetroPie-Setup/supplementary/splashscreens. All the other splash screens will be in there, typically in their own directory with just the image inside it.

Once it’s in there, run

sudo ~/RetroPie-Setup/retropie_setup.sh

Navigate to option 3 (SETUP), enable splash screens, then select your splash screen.

I can go into more detail if needed.