Intel's Arrow Lake Isn't a Game Changer

Intel (INTC 1.06%) has kept pace with rival AMD in the desktop central processing unit (CPU) market over the past few years by sacrificing efficiency for raw performance. The company's Raptor Lake Refresh chips, which launched in late 2023, use far more power and generate far more heat than the competition. Arrow Lake, officially called Core Ultra Series 2, represents Intel's attempt to put an end to the ever-growing power consumption of its desktop chips. The company has largely succeeded, delivering enormous efficiency gains over Raptor Lake Refresh. However, Intel dropped the ball in one key area that will make Arrow Lake a tough sell. Moving backwards in gaming Not everyone who buys or builds a desktop PC plays demanding video games, but gamers represent a sizable chunk of the market for desktop CPUs. Gaming performance also gets a lot of attention when CPUs are reviewed by third-party websites. For anyone who plays PC games, purchasing decisions are going to be strongly influenced by a CPU's gaming prowess. Intel's Arrow Lake chips deliver solid power efficiency thanks to an advanced TSMC manufacturing process, and performance in non-gaming use cases is generally quite good. The top-of-the-line Core Ultra 9 285K, which packs 8 performance cores and 16 efficiency cores, was impressive across Tom's Hardware's suite of productivity benchmarks. It wasn't a clean sweep, but Arrow Lake looks to be a decent option for power users thanks to solid, single-threaded and multithreaded performance gains. Gaming is an entirely different story. Intel chose a design for Arrow Lake that puts the memory controller on a different tile from the CPU cores. This decision introduced additional latency for memory access, which doesn't matter much in a lot of cases. However, gaming tends to be highly sensitive to latency. Across 14 different games tested by Tom's Hardware, the 285K loses to much cheaper options from both AMD's lineup and Intel's last-generation CPUs. Arrow Lake does better in some games than others, but overall, it represents a step backwards for gaming performance. The silver lining is that Arrow Lake chips are highly efficient in gaming workloads, which may be appealing to some potential customers. One caveat is that software updates and other optimizations could improve performance going forward. AMD faced performance and latency issues with its latest Ryzen 9000 chips, which were largely resolved with software updates. A similar story could play out for Arrow Lake. However, given the design of the chip, any gains likely won't change the story all that much. A tough sell With the right pricing, Arrow Lake would be more attractive despite the lackluster gaming performance. However, Intel likely priced these chips too high. The 285K has a suggested price of $589, which makes no sense for gamers. At the low end, the Core Ultra 5 245K is priced at $309, which is higher than the $259 price tag currently attached to the last-gen 14600K. That older chip wins out in gaming workloads, making the pricier 245K difficult to justify. The efficiency improvements delivered by Arrow Lake are impressive, and Intel will build on these for its next-generation products. Intel will likely aim to manufacture the follow-up to Arrow Lake itself rather than outsourcing it to TSMC. Arrow Lake was originally meant to be built on the Intel 20A process, but that plan was scrapped. As it stands today, Arrow Lake looks like a minor disappointment. If prices come down, these chips would make a lot more sense. But at the current pricing, it's hard to see Arrow Lake improving on Intel's market share.