In context: Intel was always going to struggle with the launch of its Arc discreet graphics cards in the face of stiff competition, a rough economy, and mediocre, often buggy performance. But the company was likely unprepared for the level of apathy that has reportedly caused even its partners to shun the Arc cards.

Igor Wallossek of Igor's Lab writes that he has spoken to some dealers, potential distributors, and manufacturers in the European area about Intel's Arc cards, and there was little interest to be found. It's claimed that, unlike Nvidia and AMD, Intel either could not or would not give any price guarantees, and its policies relating to RMAs and returns were significantly worse than those of its competitors.

Wallossek notes that Intel appears to be focusing on system integrators and OEM customers for its Alchemist cards and making the retail market much less of a priority (or not a priority at all). There are also claims that one of the big board partners has completely stopped production of Intel's cards due to quality concerns, which certainly sounds worrying.

Our own Steve Walton recently looked at the entry-level Arc 3 A380, the only card in the series released so far---and it's only available in China. The card is expected to cost somewhere between $120 to $130, making it one of the cheapest new GPUs out there, but the results do suggest a 'get what you pay for' scenario. And that's being generous: the 5-year-old RX 570 that was originally $170 outperforms it.

Moreover, the Arc 3 A380 still requires a lot more support when it comes to drivers, and performance takes a nosedive without Resizable Bar, though Intel should be able to address these issues.

Arc's problems have been exacerbated by Intel's recent financial report that revealed its Accelerated Computing Systems and Graphics Group (AXG) recorded a $507 million operating loss during the previous quarter, the result of weakening demand for PCs and components. A lot of the money is tied up in "inventory reserves and roadmap investments," Intel explained.

CEO Pat Gelsinger revealed that the company would not meet its internal target of selling four million Arc GPUs this year. He also talked about the driver issues that so many reviewers have complained about. "We thought that we would be able to leverage the integrated graphics software stack, and it was wholly inadequate for the performance levels, gaming compatibility, et cetera, that we needed," Gelsinger said.

Some in the industry say that Intel is even considering throwing in the towel and shutting down the entire Alchemist project due to its expense and apparent lack of interest, joining Optane in the tech graveyard.

A complete cancelation is an extreme scenario. Things should improve by the time the Arc cards get their full launch, but it's certainly not looking good for Chipzilla. At least the AV1 hardware encoder in the Arc A380 has been beating Nvidia's and AMD's H.264 encoders in initial real-world tests, so there's that.