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You're second point defeats your biggest pro. A box that can download partial game data and play the game locally when needed is not a simple streaming box.

Your second biggest pro is debatable. Netflix doesn't provide blu-ray quality movies, why would game companies provide cutting edge graphics with streaming. It will be just 'good enough' to save on costs, which will happen to satisfy your point of game pricing.

Cloud gaming will work because of convenience, but it will never meet the quality or responsiveness of a dedicated console, never mind what you can get on a gaming pc.