There is a lot of buzz lately about the how the cloud will change everything, not only in gaming but in general.
What many seem to ignore is that internet infrastructure does not improve at the same rate as silicon. The cost of GPU power for example, has massively improved in the last 5 years. The cost of bandwidth on the other hand, has improved only slightly, and in some areas of the world, not at all.
In the long term, it is a lot cheaper to buy the latest hardware and perform your computing tasks locally, than it is to use a proxy server. The operating costs of bandwidth used & server costs in a cloud computing scenario, simply outweigh the initial investment and electricity costs of hardware that is used locally. This is especially true for graphics rendering because massive amounts of data are involved, and thus, even more bandwidth is needed.
I expect the cloud to remain a data storage service in the future and nothing more. If/when massive breakthroughs occur in the development of internet infrastructure, then things could change.
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