What is interesting is the trend. Discrete graphics cards are being replaced by on-board video options.
This isn't news to the traditional chipset manufacturers. Nor to ATI or nVidia either of course, they have seen this coming for a long time otherwise they wouldn't both be offering northbridges with integrated graphics today.
The question is how far down this road the industry will go, and what consequences it will have.
Ultimately, though these things take time to penetrate the market fully, integrated graphics is going to erode the low-end gfx-card market completely. Integrated graphics increase northbridge costs by a few dollars and there is no way a seperate card solution can compete with that, or the assembly benefit of removing card installation completely. In time, only customers who explicitly desire and are willing to pay for a separate gfx-card are going to get one.
It is difficult to see how large a part of the market that represents. Pretty much no professionally/publicly used computers will use add-in cards. A large part of home computers won't either, though this is harder to judge.
The data quoted in this article would seem to imply the outlook for game driven gfx-card sales in PC-space is rather grim.
http://www.startribune.com/stories/535/3524128.html
How will this affect gfx-card manufacturers and content providers?
Well, the gfx-card manufacturers will loose their low-end revenue stream. This is significant but not disastrous, judging by for instance recent ATI statements. While the low-end volume has been large, the margins have been correspondingly small, so the absense of their contribution to total revenue and profits shouldn't be lethal.
Further, depending on how well the integrated solutions perform, even some of those who today would go with a separate card "just to be safe" may no longer feel the need. That would erode some of the occasional gamers part of the home market as well.
Will the gfx-card manufacturers make up this loss in sales of gfx-enabled Northbridges? Nope. No way. Whereas competition is free as far as AGP-cards are concerned, that is not the case for chipsets. Intel owns the necessary IP and decides both who it liscenses to, and at what price. Intel competes in that market, and control the terms of that competition completely. It's a no-win situation for anyone else. With AMD the situation is different, but the marketshare is much smaller.
So what do the card manufacturers need to do? In order to keep revenues coming in, gfx-card manufacturers have to keep pulling rabbits out of their hats in terms of card abilities and performance. Furthermore, they have to push the adoption of higher end features by games developers, or the incentive will to buy will not be there. This is actually in the interests of PC-oriented developers too, or they will continue to loose ground to consoles. PCs offer faster CPUs, more memory, and higher performance graphics. However, developers have to actually leverage those advantages to create compelling content. (Microsoft and Intel should have an interest in driving such development as well against anything that erodes the position of the PC platform.)
So, IMHO, within the next year or two we are likely to see PC-graphics mimic the development of PC-sound, and split into two clearly distinct parts - one integrated and one for add-on cards with the integrated graphics volume being substantially larger. Overall, the add-on card market is going shift upwards. We may or may not see PC game content follow this, but the odds are reasonable that it will.
Longer term?
Clearer crystal balls than mine are required. The chips can fall in many ways.
Entropy
Any babes out there who want to swing? 
