That depends on what you define as "real gaming machine". Personally, I don't think a PC is a "gaming machine" unless it has a dedicated GPU, even if it is a lower end GPU.
The Iris graphics will allow you to play some games at a higher framerate than the regular integrated graphics but it's still integrated graphics.
I'm currently using the Skylake i7-6560u with Iris 540 and it CAN play some games.
Hearthstone (Well... hearthstone will play on a potato), Older GOG games all run super.
Bioshock: infinite, Diablo 3, Might and Magic X, etc. Lowest 16:9 resolution with low settings and you can get 30fps.
Admitedly, the new KabyLake Iris will be a little better. havent seen benchmarchs but I would guess it wouldnt be more than 20% over the Skylake Iris.