The latency of Cloud is the biggest issue for the games tasks...
What you can do in Cloud for games (some example to understand):
+ AI non-reactive (any AI calc not interfered by real-time actions with immediate response... aka AI not processed between frame sequences... eg. AI in RTS games)
+ Open World climate/environment variations (eg. environmental lighting, rain, wind, etc)
What you can do in Cloud for games (some example to understand):
- Any type of graphic/render task (well every frame a frame processing)
- AI reactive (any type of AI that have reactive changes in milliseconds)
- Gameplay physics (there are little exceptions)
There are lot of more example... in any case little processing can be made on Cloud for games even so you need to have a backup in console in the case of internet issues in the middle of gameplay.
A good example are the MMOs... they are all Cloud based... and every MMO player here knows all the problems that happened with low latency and internet issues.
MS is trying to make all your offline experience like a MMO experience... SinCity was the latest example of a offline game using Cloud processing 
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