Intel's (INTC -8.46%) entry into the discrete graphics card market last year didn't go as smoothly as planned. The company tried to take a shortcut with its graphics drivers, using existing software for its integrated graphics chips to save time. That didn't go very well, severely hurting performance in some games.
Despite these software issues, which are becoming less of a problem as the company improves its drivers, Intel has the potential to become a major player in an industry that has been stuck in a duopoly for years. The two mid-range graphics cards launched in October, the Arc A750 and Arc A770, are priced aggressively and deliver generally solid performance.
Intel turned up the pressure this week, announcing a price cut for its lower-end A750 while talking up the vast improvements made to its drivers since launch. The move makes the A750 a compelling value for gamers on a budget, and it may help Intel boost sales during a period of historically weak PC demand.
Focusing on affordable graphics cards
Intel originally launched the A750 at $289. That price has now dropped to $249. For anyone willing to accept that the software situation is still a work in progress, the A750 is a compelling option.
In Tom's Hardware's initial review of the A750, which used the original, unimproved drivers, the review site concluded that the A750 "makes the RTX 3050 look pathetic and even gives some tough competition to the 3060." The RTX 3050 and RTX 3060 are Nvidia's most recent mid-range graphics cards.
Across a range of video games, Tom's Hardware found that the A750 trounced NVIDIA's RTX 3050 and even edged out the RTX 3060 in many cases. Issues with the drivers cropped up from time to time, but overall, Intel's budget graphics card put on a good show.
The A750 looks even better when you consider the retail pricing of Nvidia's mid-range graphics cards. The RTX 3050 sells for around $279 on Amazon, while the RTX 3060 goes for around $359. As part of its pricing update, Intel drove home the fact that the A750 is a great value compared to Nvidia's offerings. On a performance-per-dollar basis, Intel claims that the A750 at its new pricing beats Nvidia's RTX 3060 by 52%.
Through eight graphics driver updates since launch, Intel has greatly improved performance in older games. On average, the suite of older games tested now boasts a 43% improvement in frames-per-second compared to launch. These games include megahits like League of Legends and CS:GO, so getting it right is critical to winning over a large swath of gamers.
Dialing up the pressure
The graphics card market has not been friendly for gamers over the past few years. Prices soared during the pandemic, and while they've come down dramatically from the peak, graphics cards are still far more expensive today than in the past.
Demand has dropped considerably, thanks to both the bursting of the cryptocurrency bubble and a severe decline in demand for PCs. Jon Peddie Research reported that unit shipments across the industry slumped by more than 30% in the third quarter on a year-over-year basis.
Intel's price cut could put pressure on prices of competing graphics cards, especially given the current demand environment. It could also help the company boost sales in its graphics business. Intel is currently suffering steep sales declines in its PC and server CPU segments, so any additional revenue would be helpful.
Intel's challenge is to convince gamers that's it's here to stay. A slew of software updates over the past few months is a good start, and the launch of its next-gen Battlemage graphics cards next year should help the cause as well. If the company stays committed to this market, there's no reason why it can't grow its discrete graphics business into a multibillion-dollar endeavor.
