When you downscale, OBS takes your scene and shrinks it as much as you tell it to before giving it to the encoder. The most common way to reduce CPU usage is to downscale your resolution. For example, 1080p has more than twice the number of pixels in each frame versus 720p, and your CPU usage increases accordingly. The resolution that you are encoding at has the biggest impact on CPU usage. Here are some ways you can reduce resource utilization and, hopefully, make both OBS and your programs run faster while encoding:
In some cases, OBS will say 'Encoding overloaded!' on its status bar, meaning that your computer can't encode your video fast enough to maintain the settings you have it set to, which will cause video to freeze after a few seconds, or periodic stuttering. However, some people might experience high CPU utilization, and other programs running on your computer might experience degraded performance while OBS is active if your settings are too high for your computer's hardware.
OBS uses the best open source video encoding library available, x264, to encode video, and can use hardware encoders like NVENC on high end GPUs. Encoding video is a very CPU-intensive operation, and OBS is no exception.
