Computing is inherently a visual experience, and no part of our computing lives relies more on visuals than gaming. With that said, news that ARM Holdings (NASDAQ:ARMH) recently acquired the British graphics-technology firm Geometrics for an undisclosed sum should come as no surprise. The two companies had already been working together for two years to create a better graphical experience on the billion-plus devices that now run on ARM chips, and it's not ARM's first graphics-based acquisition this year -- the British chipmaker also bought display-controller technology from Cadence Design Systems in the fall, according to a GigaOm report.

These moves help ARM shore up its graphics-technology portfolio, but it could also be threatening to graphics-chip powerhouse NVIDIA (NASDAQ:NVDA), particularly if its proprietary designs are pushed aside by "good enough" graphics from baseline ARM designs.

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NVIDIA lags far behind ARM-based mobile-chip champion Qualcomm (NASDAQ:QCOM) in terms of overall market penetration -- the latter company still dominates the smartphone-processor market -- but it's catching up in tablets, a segment in which it was estimated to be the second-largest chip vendor last year. That's due in no small part to NVIDIA's focus on graphics, a far more important consideration on larger tablet screens. That position hasn't held up in 2013. According to Strategy Analytics, NVIDIA's no longer even a top five tablet-processor maker, having lost ground not only to Qualcomm (now in fourth place) but also to Intel, which had long been locked out of mobile due to a late start and a lack of mobile-software support.

But NVIDIA's Tegra 4, a long-awaited next-gen ARM-based chip, has only just hit the market in an Indian-made tablet, two years after the launch of the Tegra 3. This chip could help reverse NVIDIA's fortunes if it presents a legitimately superior graphics experience to that which is bound to come out of new ARM reference designs in the near future. So could the upcoming Logan design of the Tegra series, which appears to be at least twice as fast as the existing Tegra 4, which is itself 20 times faster than the older Tegra 2.

But NVIDIA is hardly the only chipmaker focused on graphics. Late last month, Qualcomm unveiled a Snapdragon chip that can push out graphics at top-of-the-line 4K resolutions. This new Snapdragon 805 purportedly boasts 40% more graphics power than its predecessor. The new Snapdragon is expected to launch in the first half of 2014, around the same time as NVIDIA's Logan chip.

Also working against NVIDIA is a long-running move toward cheaper tablets, which is to be expected as production ramps up and tablets become a more mainstream product. The average selling price of a tablet in 2013 is thought to be about $381, which is a little more than half of the average PC's price. A number of lower-end tablets, where "good enough" graphics are, well, good enough, now sell for well under $200. A report from DIGITIMES this July noted that the Tegra 4's high price is discouraging large-volume manufacturers from including the chip in their tablet plans. If ARM's own graphics solutions can be integrated into cheaper chips, there may be little reason for most major tablet makers to use NVIDIA instead.

Fool contributor Alex Planes owns shares of Intel. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.

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