Software Vs Hardware Encoding – Differences

If you’re looking to stream you’ll quickly find out there are plenty of decisions that you can make, one of these decisions is picking which type of encoder to use, Software or Hardware. Choosing the correct encoder type plays a critical role in how well your stream performs, and having a good performing stream is important for maintaining a loyal audience.

Encoders basically work by processing and converting raw data (Audio & Video) into data that can be used by a streaming service, either Twitch or Youtube. The speed this data processing occurs influences how well your stream plays, whether it will play smoothly, or how good it sounds. You can probably tell that software and hardware encoders will process this type of data differently.

Answer: So basically, there are two types of encoders, Software, and Hardware, and in this post, we’re going to go over how each encoder works, the pros and cons, and which is better for twitch streaming. You should leave this post knowing what type of encoder is best for you as a content creator to optimize your stream.

What Are Software Encoders?

what are software encoders

Software encoders software you install onto your computer, and they typically come with applications like OBS, so you’ll find with OBS you’ll be encoding with X264 codec. Software encoders are the most popular option among beginner and professional streamers as it’s easy to set up and free.

You will find with software encoders that they really only use the CPU to encode the data, and it will almost always use 0% of your graphics card. This means to effectively encode via software, you’ll need a CPU that is capable of streaming at your desired resolution. Software encoders will use pretty much as many cores as possible, so the more cores the better.

Since software encoding is mainly CPU intensive, you’re probably wondering which CPU manufacturer is the best. In this case, we’d recommend Ryzen for software encoding as on average they offer higher performance for the cost and more cores. Just go for at least 6 cores if you want to stream comfortably.

List Of Software Encoders

  • X264
  • Wirecast
  • VidblasterX

Pros & Cons Of Software Encoders

With software encoders, there are some pros and cons you will need to work with, like anything, nothing is perfect. Luckily, there are ways you can minimize some of the cons to make your overall streaming experience better; however, it usually involves buying better hardware which isn’t always an option for some.

Pros Of Using Software Encoders

  • Essentially free via OBS
  • Easier to setup compared to hardware encoders
  • More flexible

Cons Of Using Software Encoders

  • Lower end PCs will underperform. Typically you will need at least 6 cores
  • Higher latency can cause lag for the individuals watching the stream
  • Software encoders can result in FPS loss in games.

What Are Hardware Encoders?

what are hardware encoders

Hardware encoders work differently from Software encoders but they both have the same task in mind. Hardware encoders are usually found on a piece of hardware, in this case, it’s usually a graphics card, so you can guess the graphics card will take on the heavy duties of encoding.

If you use an NVIDIA graphics card, you’ll be able to encode using the NVENC hardware encoder which can compete pretty well with popular software encoders such as x264. But the biggest difference is hardware encoders are more concrete with what you get, so you can find it pretty hard to upgrade, unlike software encoders.

AMD graphics cards are also capable of hardware encoding, unfortunately, they do not compete with NVIDIA’s style of encoding. NVENC will beat AMD VCE in every encoding scenario, it is approximately 2.59x faster than AMD VCE which means if you’re using an AMD graphics card, it’s better to just stick with software encoding.

List Of Hardware Encoders

  • Quicksync

Pros & Cons Of Hardware Encoders

Just like software encoders, hardware encoders have their ups and downs which should be considered before going any route. As we already know, hardware encoders work very differently from how software encoders work and produce different results, so this could be the best option for you depending on your situation.

Pros Of Using Hardware Encoders

  • Will not slow down gameplay, maintains FPS
  • Great option if you’re serious about streaming
  • Offers superior performance compared to the average PC utilizing software encoders
  • Lower latency

Cons Of Using Hardware Encoders

  • Dedicated streaming devices such as graphics cards are expensive
  • Lack of flexibility

x264 vs NVENC Encoders For Twitch Streaming

With Twitch streaming you have two options, x264 encoding or NVENC, and both excel in their own ways. If you’re looking for a free option, and you already have a decent CPU, then x264 is the best option. However, if you have an amazing RTX card such as the RTX 3080, then you should definitely use NVENC as the streaming performance would be pretty good.

Hardware encoding with NVENC also uses way fewer resources than x264 encoding which makes gaming easier. A typical scenario where gaming performance is detrimental is when you’re playing a competitive game such as CSGO, NVENC encoding would be best in this scenario as FPS drops can ruin your gaming experience.

Many streamers will vouch for the x264 encoder running at the medium preset as it’s a decent balance between performance and quality, and keeping a resolution of around 720P at 60FPS with a bitrate of around 4500KBPS. This is a great option if you’re looking to encode with your CPU, and NVENC often performs on par with the x264 encoder set to medium.

Honestly, it depends on your CPU and GPUs performance, there are many scenarios where you would use a hardware encoder over a software encoder. For example, if your CPU cannot handle streaming, then we’d recommend you use your graphics card if it’s at least an RTX 2070. The NVENC encoder nowadays can produce sharper images compared to CPU encoding.


In conclusion, if you have one of the latest NVIDIA cards (RTX 20+), then we recommend you use their built in encoding capabilities, this is because it is able to take a massive load on your CPU which would otherwise be utilized heavily by both the game you’re streaming and also the encoding.

Hardware encoding won’t inhibit your gaming performance by causing FPS loss, this is because the encoding is actually processed separately from the main chip. Scenarios where maintaining a steady FPS could benefit from using your hardware encoder because certain games rely on the CPU also, and if it’s being heavily utilized, it can cause massive FPS drops.

However, if you’d prefer to stream using your CPU, then we’d recommend at least 6-8 cores to stream comfortably. 720P @60FPS requires at least 6-8 cores to run effectively without causing lag or quality issues.