Your Desktop / Steam Big Picture is laggy as hell but your games runs smoothly? Check your video codec!

Hey everyone, just wanted to share a quick write-up about an incredibly frustrating issue I finally managed to fix today. Hopefully, this saves someone else from tearing their hair out for hours like I did.

I have a very high-end gaming PC running Vibepollo, and I stream natively to an LG G3 using the Moonlight Aurora fork at 4K @ 120 FPS. In-game performance was absolutely flawless. Butter smooth, zero perceptible latency, looked incredible. But the moment I dropped back to the Windows Desktop or tried to navigate Steam Big Picture, everything went to hell. I was getting a massive, progressive input lag—sometimes up to several seconds of delay. Strangely, if I opened the Big Picture sidebar, the latency would completely disappear for a few seconds before building right back up on the main grid.

I tried everything: messing with G-Sync, disabling HAGS in Windows, forcing maximum power states on the GPU, switching capture methods (WGC vs DXGI), and checking audio sample rates. Nothing made a dent. Testing the exact same stream on my Steam Deck worked perfectly, so I knew the PC host wasn't the issue.

It turns out the culprit was the AV1 video codec. In my Moonlight settings on the TV, I had explicitly set my preference to AV1. I figured my setup was more than beefy enough to handle it, but I was wrong. While the TV handles AV1 perfectly fine for linear video streaming like Netflix or YouTube where it can buffer heavily, it completely chokes on ultra-low latency real-time interactive streams when the frame rate is variable, like moving a cursor on a static desktop or navigating a 2D interface. It creates a massive software buffer bloat, causing the input lag to stack up exponentially.

The solution was literally just switching the video codec preference back to H.265 (HEVC) in the Moonlight TV app settings. The desktop and Big Picture menus are now just as instantaneous and fluid as the actual games.

TL;DR: If you are streaming via Moonlight on a webOS TV and getting crazy progressive lag specifically on the desktop or launcher menus, turn off AV1 and stick to H.265.