If 12th gen i9 prices remain at £500-£700, they could start to look like a joke if an 8 core Zen3D CPU can offer similar performance in games, for maybe £400-£450...
60 FPS (ideally minimum) is still what counts to most gamers, if it helps AMD to compete at this level, I'm sure it will do well.
Especially if these results are anything to go by:
https://cdn.videocardz.com/1/2022/01/AMD-Ryzen-7-5800X3D-2.jpg
Might be able to get a little more out of it too, with a little overclocking.
I think the main disappointment with it, is that it doesn't use the 6nm fab. process like the 6000 series APUs, despite both releasing in H1 2022. I get the feeling AMD wants there to be a nice performance gap inbetween their 7nm CPUs and Zen4 on 5nm EUV, released in the same year.
It's very much designed to kill Alder Lake CPUs, AMD knows on desktop, the 12th gen's low power cores cores offer little performance benefit, so they are mostly competing with upto 8 high power cores.
In essence, more cache seems to go further than lower power cores (for their market).