The hardware performance depends on IPC, clock speed, and number of cores. Increasing any of those you increase performance in general. Evidently if you overclock enough an i3 it will outperform a quad.
More cores only helps performance if two conditions are met:
1: They are utilized
2: The CPU was bottlenecked before those extra cores were added
In games, if a 2 core CPU can process all threads and finish processing before the GPU finishes rendering the current frame, and has a higher IPC+Clock then a rival processor, the 2 core CPU will outperform the rival processor, regardless of how many cores it has and regardless of how many threads the game is using.
In short: If a 2 core CPU is not bottlenecked and has a higher IPC then an 192 core CPU, the two core chip will be faster. This is not affected in any way by the number of threads the application in question is using [as again: Not CPU bottlenecked]. Thats the point that is being ignored entirely by the peanut gallery.
Hardware is reaching physical limits with current technology and that we will not see tomorrow a single core clocked at 30GHz, but more and more multicores. Intel is going to release their first eight-core chip, because there is no way that they could fabricate a quad or a dual core chip with the same performance.
And I'm pointing out that software has reached its limits, at least in regards to how PC's are currently architected. Individual programs do not scale; developers have been trying to find ways to do that since the 70's, with very little success. The few things that do scale though, tend to be massively parallel, hence GPU's.
Hence why the GPU is so important: The is the one part of the system designed to handle massive amounts of parallel data, and hence why so much processing is being offloaded away from the CPU to the GPU, even as the CPU gets more cores. Even if you had a 16-core CPU, the data that can be made parallel will still execute several times faster on a GPU.
Going forward, you are going to see more processing offloaded to the GPU. Hence why both Intel and AMD are right to be focusing so much attention at getting an improved GPU on the CPU die, and focusing less on pure CPU performance.
[Also FYI, there's some REALLY interesting stuff going on at some universities right now, some of which could greatly increase processor throughput.]
I don't know what you mean by "blame consoles for holding PC's back", because it is evident that new consoles will increase PC gaming quality a lot of, even Nvidia is already saying that.
Repeating the same exact arguments made in 2005-2006 before the 360/PS3 launch. Don't buy the hype please; at least the PS360 was state of the art when they released. The PS4/XB1 at launch will be about as powerful as mid-range gaming PC's. How do you think they are going to look in 2-3 years, built around what will then be a "lowly" AMD 7770 [XB1] and AMD 7890 [PS4]?
GCC 4.7 --> 4.8.1
FX-8350: 23.34 --> 19.27.
i7-3770k: 33.05 --> 28.21.
Performance gain for the FX is 17.4%. Performance gain for the i7 is 14.6%. This is a 19% more for the FX.
Of course, the relevant improvements in performance for AMD chips will come from better support for the bdver2 FLAG. I don't know how many more improvement to wait, but 30-50% does not seem exaggerated. Better support for bdver2 will not improve the performance of Intel chips.
For a single benchmark. Others will lean Intel. Others will show almost zero effect on performance. It all evens out over the long haul.