wrt cloud, the main goal is the need to remove as much hardware out of the equation as possible. They already have to buy a controller, that is already a lot. If they can get away with just using an existing device, PC, or the TV itself that would be ideal. I would not expect them to pursue a streaming stick.
Target audiences for XCloud, as being a primary gaming service, should be places in the world where the majority of people own cellular devices, but no TVs.
Many markets like India, China, heck quite a bit of Asia, Africa, etc.
Streaming services in 1st world countries, are likely more to be used as a complement to their existing hardware strategies.
The goal of cloud gaming should be to expand the reach of gaming, not to ask the already heavy gamers to double down on what they're already using. It's really important imo, that they offer a netflix like scenario so that these new markets have a large variety of games to try, as opposed to the Stadia approach which made players buy their own titles.
XCloud is for that Asian market, the Asian market that doesn't have LAN lines running everywhere, or those places that have forgone TVs entirely. That's where streaming services are supposed to dominate. But if they've never really played games on your console, the incentive needs to be a large category of games for them to engage and try out. resolution and performance won't matter as much as variety and quality of the titles.
