Intel started the trend of improving integrated graphics with their second generation LGA1155 socket Core i3, i5 & i7 line of processors. Depending on the model, these processors sport integrated HD2000 or HD3000 graphics right on the processor die, which nowadays give acceptable performance for low-end gaming and can play Full HD 1080p video perfectly. This trend is increasing with the upcoming Ivy Bridge processors, which will be able to support a massive 4096 x 4096 pixel display, as we reported
here. AMD now also have equivalent products with their Llano-based A-series processors. So, where does this leave discrete graphics cards? Well, the low end market is certainly seeing reduced sales, as there really isn't enough of a performance difference nowadays to always warrant an upgrade from an
IGP. As integrated graphics improve further, one can see how this will hurt sales of higher end graphics cards too. The problem is that the bulk of the profit comes not from the top-end powerhouse graphics cards, but from the low to mid-end cards which allow these companies to remain in business, so cannibalizing sales of these products to integrated graphics could make high-end graphics cards a much more niche product and crucially, much more expensive with to boot.