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I have an intel i7 6700k processor with Asus z170 motherboard, with 16Gb of RAM. I checked in the display settings I have the following.

Dedicated Video Memory: 128MB
System Video Memory: 0
Shared System Memory: 8126MB

I have the intel 530 graphics.

There are a few questions that I have here.

  1. 1 What is the difference between shared and dedicated memory?
  2. If I were to play a game or render a video what will be the GPU memory available to it?
  3. If I were to buy a graphics card, should I reduce the shared memory?

I was under the impression that Intel 530 graphics have 1 GB GPU memory but I see no mention of that.

Do let me know if you want more details.

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That 128MB dedicated memory is ‘fake' video memory which is still system RAM. It is permanently allocated to the GPU and is only used by older pre-Vista games which cannot make use of unified graphics/shared memory.
The 128MB of VRAM (=dedicated memory) is also used for video engine graphics. Since most of the time, games will need more than that 128 MB of VRAM, the rest of the regular system RAM will be allocated for cache (number crunching work) alongside with the dedicated 128MB of VRAM. For example, that 128MB of dedicated VRAM does the heavy lifting by storing the biggest rendered images on the screen while a portion of your allocated system RAM takes the smaller chunks and vice versa. This is how when you play games, your RAM is used quite extensively in addition to using the hard drive to load in and cache files needed to run the game.
By default, current-gen Intel graphics can use **up to half the amount of system RAM as graphics memory (= Shared System Memory).
Depending on the OS and the driver this usage can be customized (within certain boundaries/limits), even based on application level (so per game/ application) - these settings are sometimes hidden, so you have to choose advanced/extended configuration in the driver app and after clicking a "Yes I know what I do" dialog you can mess with those settings.
So a System Video Memory: > 0 is only available on dedicated GPU (notebooks)/ extra graphic cards.
In my system I have two GPUs and per driver options the system takes the integrated GPU (e.g. for Office work, email ...) For memory or speed heavy tasks (Games, wideo, raw photo editing, compiling) I use the dedicated GPU. Depending on the OS and the driver package you as a user have full control to no control at all selecting special settings.

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