Problem with VLC running on Intel PC Stick

Hello all,
I got a JOI PC stick for free and tried to use it as a HTPC. However I noticed that it cannot run a 720p mkv file on VLC properly, as it will lag about every 10 sec.

For the spec, its an intel Atom Z3735F with 2 gb of ram running windows 10. I know this is an extremely low powered CPU however I'm can't believe a recent computer can't run a movie without lagging.

Mostly if I tried a 30min series in windowed it seems to run fine. Whenever I tried to full screen it or run a subtitle alongside it, it ll start laggin, ie the frame will freeze about every 10 sec.

Is this a hardware issue or I need to tweak some configuration??

Any suggestion??

Have you tried another player to rule out software?

Try disabling/enabling hardware decoding in VLC, depending on what it has on at the moment.