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Soleron said:

OK, let me explain.

Sandy Bridge's GPU is about equivalent to a desktop HD 5450 (the cheapest recent graphics card). It has about the rendering power of the PS3 and 360 (bear in mind that the console's resolution is only 720p normally). This means it can play console ports with decent fps on 1280x720 resolution.

Almost all PCs come with integrated or low-end discrete graphics, so this CPU (Sandy Bridge) and AMD's Bobcat (Fusion C- and E-series) will guarantee a MINIMUM graphical power of the above on most PCs. Thus game developers can finally target that and assume the mass market will be able to play them. This is a huge step over the previous baseline of rubbish Intel integrated graphics.

Some things to note though. One, the performance is still low compared to what PC gamers are used to. It won't run recent games at 1920x1200. Two, Intel's netbooks still have terrible graphics (AMD's Ontario-based netbooks will not). AMD's Llano will have much faster on-die graphics, even (5x the shader power). 

So this isn't a revolution and of course Valve were paid to say that. If anything it's Intel fixing their own past mistakes in having poor integrated graphics holding back the PC platform.

there are also some performance advantages to having the GPU on the same die as there is no delay in communication between the two and greater bandwidth. And the next gen chips (and possibly AMDs fusion chips) will support open CL so if you add a dedicated GPU you could use the integrated one for physics acceleration or just for low demanding applications to save power etc.



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