I guess people are reading different articles than me, in reference to the cloud, they specifically stated 3x CPU and storage. No mention of GPU on the servers.
That's still a lot of general purpose computational power.
I would expect that a game using the cloud would have cloud side data (a cloud install) which may or may not differ from the game. Most of that data doesn't need to exist per user, so it can be really big potentially.
I'd like to see the experiments they've done, and I think it would be interesting to play with to see what you can really practically do with it. I wouldn't want to do those experiments while trying to ship a game, so I'd expect MS to provide at least some components that are relatively easy to integrate.
I would still like to understand who is paying for it. It could well be that there is a surplus of azure compute available at peak gaming hours, but I can't see that being enough.
Hmm now we are getting somewhere, if we have a game on local storage, with our classic assets and we have a copy in the cloud with much higher res assets i could see the cloud being able to get a limited amount of data from a game that has a fully dynamic scenery , use that data to calculate new static data and shift it back to the console. Sadly i have way to little insight into what is needed to actually make stuff like this work and if it is needed in any way. The only useful place i see cloud gaming and servers like this is worlds like MMO just way more advanced games with much dynamic content, but still need someone to explain to me how a cloud based rendering engine could do anything for my local graphics. It just sounds like SciFi.
Needless to say, games like this would require internet connections and would be dead without it which is one of my "no thanks" principles.