that is probably the dumbest rumor i've heard in awhile.

its not rocket science...

Would this not cause lag as well?

Didn't say it was. 

Yes, and one of the problems (particularly for multiplayer games) is the fact that it introduces different lags for different people at different times. And should your local server point suffer a hicckup, your data may be temporarily rerouted through Johannesburg, Wladiwostok and Cork (slight exxageration, but you see the problem).

Understanding how cloud gaming works is indeed not rocket science, actually implementing and getting it to work, however, is rocket science. Your game must be written to deal with the cloud, right from the start, obviously. Then all the connections have to be fast and stable, and you beetter have a flat rate for your internet. As of now, crowd-eager people try to cop out by saying that only "noncritical parts" should be clouded, like AI, nonessential physics, "background trees" type of stuff essentially.  But noone has the slightest idea how to really get that done (SimCity 5 isn't exactly a good example here).

How useful is real time cloud computing if you consider Kinect was held back by the USB 2.0 connection as opposed to using on board chips. Throwing time critical stuff out on the cloud is not going to improve anything.

It works for mmo's and other games that do not depend on fast response times. It's not going to help 60 fps quick response games.

rocket science and magic!

Uh..I guess they're not worried about lag or latency issues then.

Yeah the cloud doesn't work half as well as people claim in does. We tried that thing with SimCity already. They weren't using cloud stuff at all.

The whole thing smells bad.

Ill have to see it to believe it..

Depends on what you get in return. Its cheaper to get a lollipop for 50 euros than 350 for a new One/Ps4 console. But you get ripped off in one of the deals. 

See I can do it aswell..