Intel (INTC +10.98%) entered the discrete graphics card market in October of 2022. The company is no stranger to graphics – its CPUs have long included integrated graphics capabilities that are good enough for general usage and even some light gaming. But for anyone wanting to play PC games at high settings and resolutions, a discrete graphics card from either NVIDIA or AMD has been the only option for a long time.
Intel ran into some trouble last year as it brought its Arc graphics cards to market. The cards themselves were plenty capable, but the software drivers were lacking. Intel tried to cut corners and failed miserably, rendering the Arc A750 and Arc A770 little more than paperweights in a wide swath of older titles.
These software issues hindered sales of Intel's Arc graphics cards. The company was initially planning to sell 4 million graphics cards by the end of 2022, but that goal was scrapped. There were even rumors that Intel was going to abandon the effort entirely. According to Jon Peddie Research, Intel snagged just 2% of the discrete graphics card market in the fourth quarter of 2022.
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Key Data Points
Major fixes
Intel is not giving up on its Arc graphics cards. Instead, the company is hunkering down and fixing the software issues that plagued the initial launch. Intel has rolled out multiple iterations of its drivers this year that have greatly improved performance in a wide variety of games. In popular games like Counter Strike: Global Offensive and League of Legends, Intel boasts a 43% performance improvement compared to launch drivers.
The improvements Intel has made, as well as a lower price on its mainstream Arc A750, have helped boost demand for Intel's graphics cards. In the first quarter, Jon Peddie Research found that Intel's graphics card market share had doubled to 4%. While Intel doesn't have high-end products that can compete with NVIDIA or AMD's best, its Arc graphics cards offer a strong value proposition in the mainstream portion of the market.
Outside of software drivers, Intel is making progress in getting game developers to support its AI-powered Xe Super Sampling feature. XeSS uses built-in AI hardware to upscale frames rendered at lower resolutions, providing gamers with higher frame rates than otherwise possible. The feature is now supported in more than 50 games.
Gaining momentum
With most of the problems associated with Intel's graphics cards in the rearview mirror, board partners are starting to warm up to Intel's Arc. Recently, Sparkle and Biostar unveiled their own versions of Intel's graphics cards, adding to the list of available models. Notably, Sparkle has been out of the graphics card business for years.
Adding more board partners should help Intel boost its market share further. In the longer term, Intel plans to launch its next-gen Battlemage graphics cards sometime next year. Battlemage will reportedly include some graphics cards that target higher-end portions of the market, although it's unlikely NVIDIA's dominance of the ultra-high-end will be threatened. Battlemage will benefit from software drivers that will be far more mature for its launch compared to Intel's initial effort.
While Intel made plenty of mistakes last year in the lead-up to its Arc graphics card launch, the company has made major progress in rectifying those errors. If Intel continues to offer good performance and competitive prices as it launches new generations of products, there's no reason the company can't be a strong third player in a market that desperately needed a jolt of competition.
