Arc won't have proper game support until it's using the Xe kernel mode driver (not until at least kernel 6.6) instead of i915. You can follow the progress of sparse rendering support for Xe here. Hardware AV1 encoding will not be supported with Xe, however.

If you want to stream your gaming (as long as it doesn't require sparse rendering) and enjoy hardware AV1 encoding of the video you will have to disable Xe and revert to i915. You can choose one or the other.

There is a little hope for i915 to fake sparse rendering support (for games that don't really use it, yet expect the feature flag). But you will still be stuck with last gen driver performance unless the optimizations are back-ported somehow.

As far as performance I found the A770 to fall quite far behind the AMD RX 6700XT for games (but no hardware AV1 encode for RX6700, the RDNA3 - RX7000 series can provide this). Who knows what the next gen Arc Battlemage will be like, but until the drivers mature I don't think you will be unhappy with AMD.