My server currently doesn’t have a video card (just the crappy on-board), it transcodes fine for one user (which is all I ever have). I don’t even notice an uptick in cpu when it’s transcoding (I’m sure it does, it just doesn’t seem to impact performance).

This is a 5 year old Dell SFF, running Windows, with 3 Windows VMs in VMware. It has no trouble transcoding, while converting videos using Handbrake. It’s maxed, but it does it.

I do plan to get a video card, it’s just not urgent.