Seeing as how this has been a talking point recently, i thought i'd give my two cents, and instead of just bashing the hell out of the idea, provide some thoughts on how it could not necessarily be terrible as long as certain conditions are met, as well as a few advantages. I am talking about something similar to the PS TV+PS Now, not the XB1's implementation of cloud, as that one loses some of the advantages.
I'll start with the biggest pro; hardware failure. Something like a PS TV or any kind of streaming box is simpler, won't produce heat, and is devoid of components that'll risk making the device unusable under certain bad conditions/circumstances. This decreases costumer frustration with hardware problems, dealing with customer service, waiting for weeks for replacement units, etc. And in the event of the box dying after the warranty is over, it'll always be cheaper buying a new one than it is buying another console. Isn't that "supposed" to be related to one of the advantages of consoles over PC? Truth is i've had more problems with consoles than PC ever since the previous gen..
The other pro is the one that MS is trying to promote; increase in processing power without dependance on local hardware. Theoretically achieving the kind of graphics you'd expect from a 400-500 dollar console would no longer cost 400-500 dollars, but much less
For the cons, I won't bother going much into them because people are already quite aware of most of them; internet requirement, input lag, compression, etc
So instead of i'll say what i think about when this model of console gaming could be implemented; what conditions could make cons be less relevant and bring the pros into the picture
1: Game pricing. Unlike retail and digital purchases, this kind of service is 100% dependant on the service provider, meaning you always depend on it to play the game. This doesn't happen even on Digital, where, at most, you lose the ability to download the game (if it's "pulled"), but not the ability to play it. Because of this, there's an approximation to the renting model. Pricing should reflect this; more expensive than renting because there's no specific time limit, but cheaper than buying because the costumer knows he won't be able to play that game "forever". Retailers would become obselete and the service providers would not have to compete with them, only with competing streaming services, driving the game prices down to acceptable levels
2: Tech advancements. The most important one IMO here is buffering or temporary storage. Basically, the box would have some kind of flash storage memory that would temporarily allocate game files to prevent DCs if either your internet fail or the streaming server fails/goes under maintenance. It wouldn't do it with the whole game, but at least enough to let you keep playing for a while; somewhat similar to PS4's PlayGo system. Of course this applies to SP games only. Other things would be the reduction of visual and audio compression, as well as minimal input lag... Also mandatory dedicated servers for games with online components (meaning that a third party could not make a game with P2P MP and sell it on the service)
Seeing as how the above would certainly NOT be doable by the time next gen comes, i could only see it happening on the one after that. Or the companies could try to bring it next gen already but without these last "conditions" being met, in which case I'd just reject it entirely.
What do you think? Still wouldn't accept cloud gaming? Would accept it even without these conditions? Or are they enough for you?