Not necessarily, the Xe2 iGPU have 1.5X performance compared to Alchemist. The desktop high power variants are rumoured to be even faster.
If desktop Xe2 gives about 1.7X performance gains and if they price it the same as last gen, it could be a compelling mid range option.
It could have been a compelling midrange option compared to it's 2 year old competition - If it were out this summer. But Intel missed their window to make it exciting compared to the next gen. Intel's best bet was to get Battlemage out in time to compete with the RTX 40x0 Supers.
Intel isn't going to win on peak performance, efficiency, brand recognition or features/support. They might win on price, but winning in only one category isn't going to move the needle - not unless they're willing to have absurdly, shockingly low prices. Like price/performance being 3x better than the next closest competitor level of shocking... Which also isn't going to happen (especially not if they have to use TSMC).
If Intel wanted to get a foothold in the next gen, their only real option was to beat the competing cards to market by a very significant amount of time. Releasing at the same time will be way too late.
They had to be on store shelves so early that Nvidia/AMD wouldn't be willing to simply announce their better product, or push up their release date - because either move would devastate Intel's marketing push.
Lets say intel does push hard to be early (but only slightly) and announces battlemage within two months for it to be on store shelves in three months (Sept). That puts their availability right into time frame where AMD/Nvidia are going to detail their next products, regardless of what Intel is doing. One or both of the competitors will be sure their product announcements make Intel's launch look DOA, and people will wait a few more weeks for the newly announced products from the established brands, which are usually out in October, November at the latest.
That's if Intel even gets Battlemage out the door this year. With as little as Intel has said about the product or their current GPU roadmap in general, it might have been pushed deep into 2025. Their whole dGPU group could be completely on fire right now, for all we know.