That's probably going to be the case :/
To even play this I have to delete the dxdiag file every time I boot up and force it to read only, and even then I'm forced to use my laptops intel 4000 instead of my nvidia GPU so I have to play 720p everything off to get 60. In contrast to running DmC at 1600x900 everything on high at 60fps, I'm definitely not happy with my purchase to say the least. Crashing once every 1-5 matches played online too. We need to let Boon know about this shit and I've already done my part (twice) on twitter.
POSSIBLE SOLUTION FOR YOUR PROBLEM: (I came up with it after seeing some posts with the dxdiag.txt set to 1024 trick on steam forums, like you probably did)
Ohhh I had the same problem with my laptop only recognizing my Intel integrated card instead of my Geforce GT525M. Here's a rundown of what I did:
The problem is that the game uses the Directx Diagnostic to figure out what card you have and on double cards the tool only recognizes the integrated one (you can see it for yourself by typing "dxdiag" into start -> run)
Now, here's the thing, you can put all your card's specifications into the game's dxdiag.txt file (it's located into User/AppData/Roaming/MKKE for others that see this and don't know) instead of the integrated specifications that appear and it will work fine! (I set the file to read-only to make sure)
Now, here's the sorta tricky part: how do you figure all those complicated parts of the specification? (dll files used, deinterlace caps etc.)
Here's my trick: having used the laptop connected to a TV or second monitor, even when you unplug it, you can right-click your desktop and choose to change resolution, THEN IS THE TRICK, it should show other monitors, "activate" them all by clicking them and choosing "extend desktop to this display"
Now, go to dxdiag tool again and you'll see the various displays, one of them will have been assigned you real non-intel GPU, now choose "save all information" and you'll have a new dxdiag.txt. Now, copy the information from you card into the appropriate places in the MKKE directory's dxdiag.txt (don't just copy the file!) AND DONE! Game should run with your card! Woot! Hope this works for you as it did for me!