@irotobo your position was it would change gaming, then gaming development. On the latter point, it will, but as I said, for each problem server-side gaming solves, it introduces another. I'm talking about cost which you're completely ignoring. Server-based solutions are fantastic if you don't have to worry about the cost, which is the most expensive aspect of providing server-based services.
Server economics are predicated on using all of the capacity for your servers all of the time, as in somebody is paying that server to run, along with the people is takes to keep it running. The vast majority of server hardware is very flexible and readily-redeployable in terms of switching VM environments. To be clear, not micro-hypervisors like you'll find in consoles, but server OS VM which have two, sometimes three, layers of virtualisation and allow realtime redeployment within a server cluster. With a few exceptions servers are designed to be adaptable for many common tasks like messaging, web, and e-commerce. But gaming is one of the exceptions where the hardware has a specific purpose and where it doesn't make economical sense to over-engineer the hardware.
So you have a design (and cost) choice You can include gaming hardware into all servers hardware designs, which would mean 99.999% of that hardware would be unused most of the time, or you have specific servers designed for running games. Your choice there is put the required hardware for the performance you want, e.g. the equivalent of six-to-twelve Xboxes onto each server blade. But for that blade to be remotely useful when not running games, and to be able to seamlessly integrate into common server infrastructure, you need all that extra - expensive - server architecture. That ECC-RAM, vastly more cache and interconnects between the individual devices. There are going to be very few, if any, adhoc demands for an ephemeral remote server with the configuration of an enhanced Xbox Series X. The most common servers demands are low-volume but 24/7/365 running or high-volume processing which is very often distributed across multiple VMs on multiple pieces of server hardware all working in unison.
xCloud is available in 28 countries which is one country more than the number of countries in the European Union. This is the biggest problem, it's very expensive to put server hardware everywhere that people may want to game from. Having launched in November 2013, Sony had PS4 in 48 countries. Twice as many countries in two months.
But the time Microsoft cover all of the countries where games over, they're starting over upgrading the earliest installed-servers because upgrading a server farm is a slow, laborious task.