Chip giant Intel (INTC -9.20%) ended the NVIDIA-AMD duopoly in the discrete graphics card market last year with the introduction of its Arc graphics cards. The company set its focus on the mainstream portion of the market, betting that offering gamers an alternative at lower price points would be a winning formula. By the first quarter of this year, Intel had scored a 4% unit market share, according to Jon Peddie Research.
Intel's graphics cards brought a lot to the table for the price. In Tom's Hardware's review of AMD's budget RX 7600 graphics card, Intel's cheaper Arc A750 nearly matched AMD at 1440p resolutions, and in ray tracing it pulled ahead. Intel's next-gen "Battlemage" graphics cards are expected to launch next year, and Intel is expected to address a larger swath of price points with these new cards.
An unforced error
The biggest weakness of Intel's graphics cards has been software. No matter how powerful or capable the hardware is, the software drivers that enable leveraging that hardware can greatly impact performance in video games. Intel attempted to take a shortcut on the software side last year by leaning on the drivers for its integrated graphics chips, but that was a mistake. At launch, Intel's Arc graphics cards performed well in newer games but were wildly inconsistent in others.
Intel has made great progress in rectifying this situation, rolling out software driver updates at a rapid pace. Performance across popular older games has vastly improved. The company claims that average frames per second in games that use DirectX 11 has been boosted by 19% overall, and performance gains have been even larger for DirectX 9 games.
Despite this progress, it's clear that Intel's software drivers still lack maturity. One of the biggest games of the year, Starfield, from Microsoft's Bethesda Game Studios, officially launches this week but has been available since Aug. 31 for those who preordered certain versions of the game. Anyone with an Intel Arc graphics card hoping to play the game has not had a good experience.
It's not that performance is lackluster on Intel's graphics cards. Instead, the game apparently doesn't work at all. Reports of the game crashing or failing to start are rampant. While NVIDIA and AMD released updated drivers specifically targeting Starfield, Intel neglected to do so. Intel has since launched a beta driver update that at least makes the game playable, but a full driver update is still in the works.
Eventually, Intel's Arc graphics card should deliver solid performance in Starfield, but this incident has likely turned off some gamers from even considering Intel as an option. While Intel has put a lot of work into improving its graphics drivers, the company dropped the ball in a very visible way with Starfield.
Growing pains
The performance problems with Intel's graphics drivers since launch have likely slowed down the adoption of the company's Arc graphics cards. As Warren Buffett says: "It takes 20 years to build a reputation and five minutes to ruin it." And Intel is gaining a reputation for shoddy and unreliable drivers. Its graphics cards offer solid performance per dollar and work just fine for most gamers, but the Starfield incident could zap Intel's momentum.
As Intel gears up to launch its second-generation graphics cards next year, the company needs to convince gamers that this type of driver misstep won't happen again. Gaming graphics cards represent a multibillion-dollar opportunity for Intel in the long run. There's no reason Intel can't be a strong third player in this market as long as it gets its act together on the software front.
