AV1 Encoding Now Widely Supported for Lower Bandwidth and Higher Fidelity

The biggest leap in this performance boost comes from expanded support for AV1 hardware encoding, allowing supported GPUs to stream games at dramatically reduced bitrates while preserving sharp detail. Previously limited to a smaller set of high-end graphics cards, the new update enables AV1 encoding on modern NVIDIA, AMD, and Intel GPUs, including many mid-range models. This means that a game with fast-moving textures and complex lighting can be transmitted over a home network at rates as low as 20 Mbps without visible macro-blocking or color banding. In tests, titles like *Cyberpunk 2077* and *Elden Ring* showed a noticeable reduction in ghosting during high-action scenes, and the encoding latency dropped by nearly 30% compared to H.264. For users with 4K displays, this is a game-changer, as AV1 allows for crisp 4K60 streaming over a standard gigabit connection while freeing up bandwidth for other devices on the network. Additionally, the new implementation includes a dynamic quality scaling system that adjusts the encode settings frame-by-frame based on scene complexity, ensuring that dark corridors and bright open landscapes both receive optimal bitrate allocation. Because AV1 is royalty-free and widely used in video streaming services, Steam has been able to borrow mature optimizations from the broader ecosystem, resulting in a more stable and efficient encoder that performs consistently across different hardware generations. Owners of older GPUs without AV1 hardware blocks are not left behind either, as the update also includes a much-improved software AV1 encoder that is roughly twice as fast as before, making high-quality streaming possible even on systems without dedicated encoding silicon.

Reduced Latency and Frame Pacing via New Adaptive Network Pipeline

Beyond raw encoding, this performance boost introduces a completely reworked network pipeline that adapts in real time to changing conditions on a home network. The previous version used a static buffering approach that added a fixed amount of delay to avoid frame drops, which felt sluggish when playing fast-paced shooters or rhythm games. The new adaptive pipeline continuously estimates the round-trip time between the host and client, then dynamically adjusts the buffer size to the smallest safe value. This can cut perceived input lag by as much as 20 milliseconds, a difference that expert players will immediately notice in games like *Counter-Strike 2* or *Rocket League*. Furthermore, the system now employs a predictive frame-pacing algorithm that examines the rendering time of the previous frames to schedule the display of incoming frames. Rather than showing a frame immediately upon arrival, the client holds it for a few milliseconds if it detects that the next frame is imminent, resulting in a far smoother visual experience with zero judder. Steam also added support for Ethernet-over-Power and Wi-Fi 6E networks, which often suffer from occasional packet bursts; the new pipeline smooths over these spikes by temporarily increasing the encoded frame size without causing a stutter. For wireless setups, the update includes a channel conflict detection feature that automatically switches the streaming traffic to a less congested frequency band if interference is detected. Combined, these network improvements mean that even a modestly configured home network can achieve a consistent 144 fps stream, whereas previously a brief spike in network activity would ruin the entire session.

Host-Side GPU Scheduling and NVENC Optimizations Cut CPU Overhead

A major source of performance loss in older Steam streaming versions was the CPU load generated by the encoder and by the game itself fighting for resources. This update introduces host-side GPU scheduling that prioritizes encode tasks on separate hardware queues, allowing the encoder to run concurrently with the game without stealing execution units from the rendering pipeline. On NVIDIA cards, the custom-built NVENC integration now supports asynchronous encoding, which lets the driver encode a frame while the next frame is still being rendered. This overlap hides almost all of the encoding cost behind the game's own frame time. On AMD and Intel GPUs, similar optimizations were implemented using the vendor's low-level access layers. As a result, CPU usage during streaming drops by an average of 15–25%, which is particularly valuable for games that are heavily CPU-bound, such as simulation titles like *Cities: Skylines II* or *Factorio*. The update also includes a new "Game Server Mode" for users who run dedicated servers on the same machine, preventing stream encoding from competing with server threads. Additionally, v-sync and frame limit settings now interact more intelligently with the streaming pipeline: when a display stream is active, the host automatically aligns the game's frame presentation with the encoder's capture interval, eliminating the previous issue where v-sync caused the encoder to capture duplicate frames. This not only improves smoothness but also reduces the bitrate waste, as each encoded frame now contains genuinely new information. Gamers with multi-GPU systems can even offload all encoding to a secondary graphics card, making the host machine's primary GPU fully dedicated to gameplay, a feature once reserved for specialized capture software.

Client-Side Upscaling and Display Matching for Crystal-Clear Output

On the receiving end, Steam's In-Home Streaming has also received a substantial upgrade through integrated client-side upscaling and refresh-rate matching. When the host renders a game at a lower resolution to boost performance—for example, 1080p on a 4K display—the client now uses a machine-learning-based spatial upscaler that reconstructs edges and textures far better than the old bilinear or lanczos filters. This upscaler, trained on a vast dataset of game imagery, adds sharpness without introducing ringing artifacts, making a 1080p stream look nearly as detailed as a native 4K render. Furthermore, the client now automatically matches the stream's refresh rate to the actual capabilities of the display, rather than locking to 60 Hz. If you are using a 120 Hz or 144 Hz monitor, the host will encode and deliver frames at the same rate, as long as the network permits. Conversely, if the frame rate cannot be maintained, the client seamlessly switches to a lower multiple while preserving the judder-free experience. The update also adds a new "Latency Diagnostic Overlay" in a keyboard shortcut, providing real-time charts of network jitter, rendering lag, and encoding time, helping users fine-tune their settings. For Steam Deck owners, the client-side optimizations are particularly noticeable: the portable device can now decode AV1 streams using its hardware decoder, which drastically reduces battery drain compared to the previous software decode path. The Deck's screen also benefits from the display matching feature, as games running at 60 fps on the host can be displayed at the Deck's native 40 Hz or 60 Hz without any motion artifacts. These client improvements ensure that the performance boost is not one-sided, delivering a complete high-quality experience from the host GPU all the way to the player's eyes.