Xcloud will be getting upgraded to XSX hardware for rollout next year.
With the first blade supposedly off the assembly line last week.
So not a matter of upgrading the 1S blades to VA, they will just get superceded.
My post was perhaps not clear, the question was 2 parts in my mind.
Will Xcloud become an independent SKU with its own hardware spec, and will current hardware be upgraded to SSD if that becomes part of it. Loading times for cloud seems a poor show and could be a pretty low effort upgrade for quality of life for users. Faster to initialise instances, faster to load or pre load the game before it even gets to playing the game. The CPU and GPU in Xcloud atm is slightly clocked higher than retail I believe to ensure a more reliable experience.
One S will be a platform for game support for a good few years and also perfectly viable for already released One and 360 titles, the new hardware will be running 4 Xbox One instances so this will be a deployment with a local SSD.
I am unsure on economics and power and heat but the newer one s blades seem relatively new, cool and bar the SSD very similar to the hardware replacing them at least if we think vanilla Xbox One code.
So factoring in the new servers that will have SSD storage locally, will Xcloud become a hybrid SKU for game devs if they wish, the rendering power of Xbox one with an dependable SSD that allows better performance.
If going hybrid they could add better memory bandwidth to remove ESRAM and project scarlet blades will have gddr6 but what overall bandwidth when the pool is split and under contention with the other instances is unknown.
Was just an idea, I think Xcloud is a large push, the GDK has cloud as a platform, Phil has also referred to it as a platform so I am not sure it's too far fetched to see it become it's own thing at some point. This may be reserved for Lockhart games which may fit better to streaming at a lower resolution with all the new technology but I feel even without game code changes a SSD for vanilla Xbox one could be better with better IO interconnects which the dedicated cloud design possibly already has.
Possibly not for this thread after thinking this response out, now it includes possible memory and economics...