No, doesnt have to, theyve traded doing most of the graphics calculations on the GPU for doing it with CPU power(like games were years ago before GPU's hit the market), and with a low color rate and low resolution needed by a TV they dont need much video RAM.They do the majority of the rendering before it even gets to the graphics bus, it has quite a bit of system memory and a bunch of internal bandwidth though, so it can handle a heavy flow of data.It also uses RISC processors which is something different these days, thats a unique twist, I hate microsoft but I have to hand it to them, this is one very very powerful little game box theyve put together.