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Machiavellian said:

To be honest, who cares if the whole thread believes one way.  It would be different if the whole thread was compose of developers and they were giving their feedback on what they have experience but its not.  Also people seem to be getting confused about the two concepts between Gaikia and Cloud compute.  

When I think about cloud compute, I think about an Application Server or Database.  The game code just sends API calls to the App Server or if its a database you just execute a stored procedure.  The amount of information sent along the wire is very small and can be compressed if need be because the Xi have dedicated hardware for encoding and decoding.  The information can be sent back compressed, and cache in local memory to be fetch by the CPU or GPU.  One of the things that was leaked about the X1 APU is that it can process compressed data directly.  An enterprising developer probably could host a lot of jobs on the cloud platform and just call those jobs just like calling a stored procedure.  The data could be sent way before the player get to those parts letting the local APU concentrate on immediate situations.

Processing compressed data is nothing new though. I was doing it in '96 out of pure necessity, gpu's have been doing it for a decade with compressed textures. It's nice that is has dedicated compression and decompression but the usefulness of a standard compression method for game data is very limited. Within the company I worked for: if zip can make a significant dent on your database, then you're doing it wrong, start optimizing. We rendered and computed directly from compressed data that zip could not get more then 1% of 'air' out of. And compressed at a minimum of 5x better then using a standard compression method on the original data.

It's a trade off. Everything you download and store ahead takes away from available memory for immediate tasks. I've also run into plenty of situations where it was better to do just in time calculations instead of sacrificing memory and bandwidth by pre-storing data.

Plus the server needs to be ready with an instanced copy of your game in memory with where you are. Pretty much running in parallel with what you are doing. To make that efficient (and not run a second game for everyone playing) it will require a lot of resources to make the server side part efficient. Unfortunately it's not so simple as making a few api calls and getting a bit of data back.

it's interesting but a lot more complicated then folding@home and seti search type distributed computing.
Next gen's mmorpg are going to be amazing though :) (I hope)