Chip giant Intel (INTC) is putting pressure on rivals Nvidia (NVDA) and AMD (AMD) with the launch of the company’s Arc graphics chips. And it could shake up the graphics chip industry, not to mention help consumers like you and me.
Intel has been teasing its Arc graphics since 2021 as an alternative to offerings from Nvidia and AMD for customers looking for solid graphics capabilities for gaming and content creation.
The company will eventually release a list of Arc-branded chips and cards, with Arc 3 serving as the first salvo in Intel’s fight to steal market share in the massive PC gaming market from Nvidia and AMD. And that could benefit consumers at a time when global chip shortages have pushed graphics card prices higher.
It makes sense that Intel is diving headlong into the gaming market. According to NPD Group, PC hardware sales in the US grew 25% to $5.74 billion in 2021. And gaming isn’t going anywhere anytime soon.
According to NewZoo, global game sales will reach $218.8 billion by 2024. PC games accounted for around 20% of game sales in 2021, so it makes sense for Intel to jump into the category.
Need more proof? Look no further than Nvidia’s 2021 earnings report. For the full year, Nvidia’s gaming division raked in $12.5 billion of its $26.9 billion in total revenue. That’s more than the $10.6 billion in revenue generated by Nvidia’s data center business.
In other words, while Nvidia’s stock price reflects investors’ hopes for the future of the company’s data center business, it continues to make most of its money on game equipment.
And that’s where Intel’s discrete Arc chips come in. You see, Intel currently offers what is called its Iris integrated graphics accelerators. Built-in accelerators layer on top of a laptop’s CPU and RAM to power on-screen graphics. And while that’s fine if you’re browsing the web or streaming movies, gaming is best left to discrete chips.
This is because discrete graphics chips rely on their own graphics processing units (GPUs) and RAM, meaning they can run games that would otherwise choke a system with integrated graphics.
That’s not to say that Intel’s Arc 3 chip will crush Nvidia’s chips, far from it. It’s Intel’s entry-level chip, after all. So while you can play the latest games, you won’t be able to increase the graphics settings to their highest levels.
Plus, we don’t even know how Intel’s Arc chip compares to entry-level discrete chips from Nvidia or AMD. That’s because Intel only gave us a glimpse of how its Arc 3 chip stacks up to its built-in Iris accelerator.
Naturally, Arc 3 performs better than Iris by a wide margin, but that’s not saying much. As a gamer, I’m more interested in how the Arc 3 compares to Nvidia’s RTX 3050 laptop chip or AMD’s Radeon RX 6500M. We’ll probably start to see those comparisons pouring in when the Arc 3 laptops hit the market.
Intel prepares for the future
Of course, the real fun will begin when Intel introduces its Arc 5 and Arc 7 chips this summer. These chips, unlike the Arc 3, are designed specifically for what Intel calls “advanced gaming” and “high performance gaming.” Basically, if you’re hoping to get really impressive graphics performance from your games, you’ll want to invest your money in a machine with an Arc 5. And if you’re hoping to maximize the graphics in your games, you’ll want to go with the Arc 7.
Intel’s biggest test, however, will come when it launches its desktop graphics cards this year. But don’t set your expectations too high just yet. The company has already telegraphed that the first generation of desktop cards won’t meet the performance expectations set by Nvidia and AMD’s own cards.
This will likely happen when Intel rolls out its third-generation graphics chips and cards. Codenamed Celestial, these chips and cards are designed for what the company calls ultra enthusiasts. Who, if I’m being honest, is someone like me.
If all goes as planned for Intel, then the company will have the kind of graphics know-how to present itself as a true third graphics option for consumers and creators. And with graphics card prices already skyrocketing thanks to global chip shortages and cryptominers snapping them up as soon as they hit the market, consumers will likely welcome a third option with open arms. Especially if it makes buying a card easier and cheaper.
That said, it will take time for Intel to convince gamers. Nvidia and AMD have incredibly loyal user bases. And when it comes to the technology that powers a gaming rig, gamers want something they know will perform well.
But if Intel’s chips and cards can match what Nvidia and AMD have to offer, it could become a viable third graphics chip maker and, potentially, supplant those companies as graphics card kings.
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