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This is huge. I've been waiting for this. They promised it over a year ago. I've jumped in and tested the beta a dozen or so times on PC.
While lag is already more tolerable on a PC than an Android phone right now, the step down in graphical quality is noticeable when you compare it to NVIDIA's GeForce Now-- when properly calibrated. It's more laggy, too, but the graphics are the big separator, though that probably isn't all about the server's processing power. The difference between a 1.404 TFLOPS (GCN 1.0) and 11.76 TFLOPS (Pascal) server is night and day even after compression. I've used Control as a testing title which might be a bit unfair because it's NVIDIA-optimized, but it was also optimized for the XSX/XSS, so the new servers should balance that out.
The top tweet there is why Microsoft is going to eat Stadia's lunch. Google has been crawling on this when they needed to sprint since they have no other wedge into gaming.
I forecast this as the key cornerstone strategy for the future of any cloud gaming service roughly a year ago:
As I wrote in the other thread all of these companies are attempting to rope consumers into helping finance the R&D for a future technology rather than financing it themselves.
As I see it the ultimate stage of development will be when this service comes installed in TVs like Smart TVs that already carry HTPC capability out of the box. It doesn't require powerful hardware; the most demanding aspect, really, is the networking card built into the chipset. All it needs is this chipset + the software. Then you subscribe to whatever service is offered on that particular TV.
At that point every TV sold will be a gaming console ready to go.