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Zappykins said:

The misinformation and assumptions on this thread are funny as many are incorrect. Azure, or 'The Cloud' will use up to 11 severs to render the structure of the city - which is large and destructable.  The your local computer will decompress , like it does when you watch a movie off Youtube or Netflix, and apply your prescpective and other details.  It doesn't use that much bandwith at 2-4 down and 1 up.

Here is a demo from a few years ago from what Microsoft and Nvidia were working on together. 

I remember that demo and these were the results
http://www.ppsloan.org/publications/Crassin13Cloud.pdf


Irradiance maps would fit within the bandwidth yet don't look any better than what we already have locally.
Voxels are already exceeding the bandwidth limit.
Photons is where you start to see noticeably better lighting, yet is also way out of reach.

That 2-4 mbps bandwidth will be used to send changes in geometry to the client, and changes in direction and velocity of existing active chunks. So in a sense it does work like video compression as it only needs to send what changes, except it's lossless and likely doesn't need to update free falling objects (console can easily do that) Ofcourse there are still limits, 4mbps is 17kb per frame at 30fps, not a whole lot when everything blows up.