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Alby_da_Wolf said:

I agree. And surely, as I wrote in another thread, any kind of online game with massive, crowded and detailed world are the ones that can benefit the most from the cloud compared with other solutions, and having to be connected anyway, really relying on the cloud can't be a problem, but just an improvement.
I'm quite concerned by the lag because despite my Internet bandwidth grew considerably since I first got connected, the lag of my connection still sucks, and it's quite erratic too. Despite this problem, that affects many others besides me, it's clear that if we consider the sum of lag plus servers response time, a cloud solution with granted resources can still improve its part of the total, so if internet lag is overwhelming, then cloud can do little to improve things, but it can already start improving things whenever the lag, despite still bad, is in the same order of magnitude of the slowest traditional server solutions response time, and when these latter suffer from eccessive traffic.

To sum it up, even with my lag, I can already be fine with the cloud if it's for online and it isn't shoehorned into local single player: for any online games it's already an improvement, whatever the lag (although a scarcely noticeable one if lag is very high), but for cloud enhanced local single player games lag still needs to improve a lot, except in the areas with the most advanced and powerful average internet connections.

The lag problem is something that the COD developers talked about during an interview about dedicated servers.  Most IPs do not state correctly their location so people who are totally in another country get paired up with the wrong people.  Also people can be right next to each other but the hops between both players can be significant.  To combat this problem, the COD developers stated that they will be looking at hops between players instead of location to improve connection in MP games.  With Dedicated Servers running locally to your location and matchmaking adding people with the shortest hops to that server, this should pretty much kill the lag you are talking about and an hofully insure you get the best ping and connection in MP games

I believe if MS employ these same techniques, it would take care of the lag problem for singleplayer cloud based games.  This might be a reason why MS needs 300,000 servers.  The more servers local to people using cloud based singleplayer and MP games the better able they will be in handling lag and bandwidth issues.