The A770 actually has more transistors than the RTX 3070 Ti:
RTX 3070 Ti: 17,400 million transistors
A770: 21,700 million transistors
https://www.techpowerup.com/gpu-specs/geforce-rtx-3070-ti.c3...
https://www.techpowerup.com/gpu-specs/arc-a770.c3914
It has taken Nvidia decades to figure out how to use transistors as efficiently as it does. It was unlikely for Intel to come close with their first discrete GPU in decades.
That said, it is possible that better drivers would increase A770 performance, although I suspect that reaching parity with the RTX 3070 Ti would be a fantasy. The RTX 3070 Ti has both more compute and more memory bandwidth. The only advantage the A770 has on its side is triple the L2 cache.
To make matters worse for Intel, I am told that games tend to use vendor specific extensions to improve shader performance and those extensions are of course not going to be available to Intel GPUs running the same game. I am under the impression that this is one of the reasons why DXVK cannot outperform the Direct3D native stack on Nvidia GPUs. The situation is basically what Intel did to AMD with its compiler and the MKL in reverse.
In specific, information in these extensions is here:
https://gpuopen.com/amd-gpu-services-ags-library/
https://developer.nvidia.com/rtx/path-tracing/nvapi/get-star...
Also, I vaguely recall that Doom Eternal used some AMD extension that was later incorporated into vulkan 1.1, but unless ID Software updated it, only AMD GPUs will be using that. I remember seeing AMD advertising the extension years ago, but I cannot find a reference when I search for it now. I believe the DXVK developers would know what it is if asked, as they are the ones that told me about it (as per my recollection).
Anyway, Intel entered the market with the cards stacked against it because of these extensions. On the bright side, it is possible for Intel to level the playing field by implementing the Vulkan extensions that its competitors use to get an edge, but that will not help it in Direct3D performance. I am not sure if it is possible for Intel to implement those as they are tied much more closely with their competitors’ drivers. That said, this is far from my area of expertise.