I believe that can be done nowIn a game like Forza 5, you could use the cloud e.g. for managing and hosting global racing events...or even global racing leagues, where people all over the world can participate at tournaments.
That could very well be and makes more sense to me for the beginning of the service. We even have the game galactic reign that exactly does this.
I think that cloud services will start slowly with the 'obvious' services first, but as time and tec development goes on, it eventually takes off during X1 lifetime...similar to the SPUs in the, which are kind of PS3's local mini cloud
Just curious, the developers who will use MS's cloud, will be paying MS for renting cloud "space"?