Advanced Micro Devices (AMD -0.35%) has long struggled to compete with rival NVIDIA (NVDA -3.33%) in the priciest segment of the graphics card market, where performance is king. AMD's RX 7900 series graphics cards still fall a bit short of NVIDIA's best, particularly in games that make heavy use of ray tracing, but the gap is smaller than it's been in a long time.

The best value, but not the best performance

Prior to the launch of AMD's RX 7900 series, PC gamers who wanted the absolute best performance and cutting-edge features had two choices: The $1,199 RTX 4080 or the $1,599 RTX 4090, both from NVIDIA. Because these cards are new and in short supply, real-world prices are much higher. As it stands today, an RTX 4090 will set you back more than $2,000 if you buy from Amazon.

AMD's RX 7900 XT and RX 7900 XTX undercut NVIDIA on price, with suggested prices of $899 and $999, respectively. The company reportedly has more than 200,000 of these cards available for launch, so it's possible real-world prices won't be dramatically higher than suggested prices.

The first reviews of AMD's new cards are in, and the main takeaway is that the top-tier RX 7900 XTX is a potent entry in the high-end graphics card market. AMD still can't touch the far more expensive RTX 4090 in terms of pure performance, but it does provide a solid alternative to the RTX 4080.

There's one caveat here: Ray tracing is still a weak spot for AMD. In video games that don't use ray tracing, by using the highest settings at a 4K resolution, the reviewer website Tom's Hardware found that AMD's RX 7900 XTX edged out the pricier RTX 4080 by a few percentage points overall. That's a good result given AMD's card is priced $200 lower.

But in titles that do use ray tracing, NVIDIA's RTX 4080 takes a commanding lead. In fact, NVIDIA's last-gen RTX 3090 Ti beats out AMD's new cards by a sizable margin.

AMD's new graphics cards aren't going to win over gamers who want the absolute best performance no matter the cost, and they aren't going to win over gamers who view ray-tracing performance as important.

But for anyone who wants to be in the ballpark of the best performance, doesn't care all that much about ray tracing, and is unwilling to pay extreme prices for an NVIDIA graphics card, AMD's RX 7900 series should be very appealing.

A good sign for 2023

While AMD is still unable to match the performance of NVIDIA's most expensive card, the fact that the company got as close as it did with the RX 7900 series is a positive sign. As both NVIDIA and AMD fill out their graphics card lineups in 2023 by launching cards at lower price points and going after the higher-volume portions of the market, AMD should be in a good competitive position.

Since ray tracing is so computationally demanding, it matters a lot less for lower-end cards. Outside of ray tracing, AMD's RX 7900 series puts on a show. NVIDIA's ray tracing advantage will be much less meaningful in the mainstream graphics card market, so AMD should be able to trade blows with whatever NVIDIA puts out.

A possible spoiler is Intel (INTC 0.64%). The company entered the discrete graphics card market earlier this year, focusing on mainstream cards with prices topping out at $349. Intel's cards are somewhat hobbled by software issues, but the company is making progress on that front. It will be a three-horse race at lower price points, which is probably not a good thing for AMD.

NVIDIA is still the king of the cost-is-no-object portion of the graphics card market, but AMD has put up a strong showing with its RX 7900 series. With Intel in the mix as well, 2023 is shaping up to be the most competitive year for the graphics card market in a long time.