Honestly, there is more. What they really calculate in cloud is physics - and only physics (not a surprise, i was expecting this). They still need a powerfull PC GPU to render this. This demo is a proof, that this tech is IMPOSSIBLE to use with X1.
If we forget for a minute about this fact, there are of course still more things to consider - bandwitch and latency. Not only ppl without internet woudln't be able to play. The same goes for ppl with poor internet access. This means a huge platform defragmentation which is bad for everyone - players, developers and event MS.
The next. We need to consider, that these 300.000 whic currently calculate only shitty AI for opponents for some games or do some very basic and primitive offloads now need to calculate physics (i don't even mean graphics, go first paragraph). They will need milions of such servers to calculate this for milions of players. This is a next thing, next huge cost and no ROI.
This whole demo and it's explanation is a big insult of xbox players. But this is a problem of MS PR, which shouldn't focus trying to pull more interest by telling stories. This will going to backfire. Hard and soon.
And to the GAIKAI thing. Problem is GAIKAI renders everything on the server side - it works like a RDP or Splashtop or ICA if you know what i mean. And yes, they will charge for this service, because it costs a lot. And yes, Sony already shown working games, not the red herring.
