You’d be forgiven for looking at the raw hardware specs of both consoles - which on paper - Sony’s upcoming PlayStation 4 looks to have the upper.

Whilst we won’t see the full potential of the physical hardware until late in the cycle – with golden late releases such as The Last of Us – the Xbox, this time, has an unmatchable advantage out the gate which is miles up from raw hardware...

... It’s the Xbox Live Cloud.

Very few people have grasped the importance of over 300,000 dedicated servers; working to provide an optimal gaming experience. Whether reducing the CPU load on your console to increase graphics, scale masses of enemies, or power the evolving AI’s found in Forza 4 – this isn’t possible from Sony.

Not trying to simply bash Sony, but Microsoft (with their leading Azure technology) and thousands of data centres internationally; simply cannot be matched.

It may take a while to start seeing titles which truly take advantage of the Cloud, other than a couple of launch titles including Titanfall and the aforementioned Forza. But when you start playing even the most basic popular multiplayer games such as Call of Duty on the Xbox, and you start noticing the reduced lag; the lack of that player which (it’s not just in your mind) has a competitive advantage – good luck trying to make the switch back.

Of course, you, the developer – could add your own dedicated servers; if you have a gigantic budget.

Not even the most popular gaming houses can afford to run them. Instead, the usual system is player-hosted servers whereby the player starting the match hosts the server for everyone else who connects to his/her console.

This uses system resources which could be used elsewhere - whilst making the playing field uneven.

Jon Shiring at Respawn Entertainment, the studio behind Titanfall, made a great post on the advantages of the Xbox Live Cloud. In said article, he explains [about dedicated servers]:

“This is something I have worked on for years now, since coming to Respawn. A developer like Respawn doesn’t have the kind of weight to get a huge price cut from places like Amazon or Rackspace. And we don’t have the manpower to manage literally hundreds-of-thousands of servers ourselves. We want to focus on making awesome games, not on becoming giant worldwide server hosting providers. The more time I can spend on making our actual game better, the more our players benefit.

I personally talked to both Microsoft and Sony and explained that we need to find a way to have potentially hundreds-of-thousands of dedicated servers at a price point that you can’t get right now. Microsoft realized that player-hosted servers is actually holding back online gaming and that this is something that they could help solve, and ran full-speed with this idea.

The Xbox group came back to us with a way for us to run all of these Titanfall dedicated servers and that lets us push games with more server CPU and higher bandwidth, which lets us have a bigger world, more physics, lots of AI, and potentially a lot more than that!”

This dedication by Microsoft to tackling game development issues may surprise the critics.

Are you excited by the newfound potentials offered by the Xbox Live Cloud?

http://www.developer-tech.com/news/2013/aug/22/xbox-one-actually-more-powerful-ps4/

First and formost all MS resources are virtualize.  There is a big reason for this and its the reason they can maintain 100% uptime for their customers.  Read up on the partnership between Samsung and MS on MS datacenters and how MS software decouple business software from the hardware.  On Azure, if a cusotmer software is running and someone just pulls the plug on a datacenter, the customer would not see a break in their process.  The reason is that MS does not tie the software to hardware but instead there is a pool of resources.  IF one source goes down, another picks up the work switching between these nodes are seamless and the customer never experience any downtime.

So when you dismiss these "Virtual Servers" it shows me you have not done your homework and you really do not know how Azure works and the software MS built to manage all of it without having to have thousands of admins administrating thousands of servers.

Actually it was talkig about sending thousand of bits of information and using thousands of servers to process that information.  It appears you got tunnel vision.  Even when MS talked about cloud computing they never talked about graphics so if thats what you were looking for then I am sorry.  What Orleans does is allow thousands of pieces of code to be executed and routed anywhere in the world at split second speed.  This would be the same for game code. 

Yet we all know Sony have their own cloud system which actually has the fastest stream rate going and will host entire games for you so you can play them before they have downloaded......

Go somewhere else troll.

You are again drinking the Kool-Aid.
You obviously don't know what you are talkning about. Game code being processed in the cloud is really not pheasable now or any time soon. Bandwith issues that MS can do absolutely nothing about make it impossible. Keep drinking the juice though.

Your virtual Superpowered cloud is just PR bullshit. Like I said before, do some research outside of MS. You just keep pushing PR bull MS has been spreading. Like I keep saying, how can you be so faithful and defend the statements of a company caught lying about these things multiple times?

@bolded that is hypocrasy.

You know what game code involves? Graphics! You write code to create a graphics engine.

Assuming cloud computing power and internet connection speed are adequate, the decisive factor becomes lag. To "bake" lighting at a rate that makes it almost the same as dynamic, even bad lag, as soon as it's below, say, 80ms, should be enough to make the delay unnoticeable in most cases, to accelerate AI as well, but for other things a much lower lag will be needed: for graphics, to be useful at a 60HZ frame rate, lag+frame coprocessing time must be within 16ms, for physics, it depends on the update frequency of the game's physics engine, lag in the few tens ms range will be enough for many games, but not for racers, where the physics engine can process at a frame rate of 360Hz or more: in this case, though, the cloud could process the physics of AI-controlled competing cars at the proper frequency and communicate their position at a lower frequency, but only as long as competing cars aren't directly interacting with the player's car, like in clashes. In this case, though, the console will have to directly handle the physics of just two or little more (in case of bigger clashes and accidents) cars, unless there is a pile-up. In case of pile-ups, obviously, if the game was using more than the power available locally on the console, there will be a degradation of the game's performances. In flight sims, again, the cloud could process the physics and AI of anything that is too far away to have direct interaction with the player's aircraft, but like with racers, too many objects approaching the player could cause performances degradation. Also, in the case of combat flight sims, unless the lag be very low, objects in the range of the targeting system will have to be processed locally, even if still far away enough to be out of range for the weapons, otherwise the error induced by the lag could make it difficult to lock on them if they are performing fast evasive manoeuvres.

So let me ask you this question.  When the Xbox (first one) ditched dial up and went for broadband only what happen.  Next thing you know you have this device that only use broadband and adoption of broadband started to climb.  Next thing you know Sony does the same and no one very looked back.  Companes invested more money into broadband because of more subs.  This will be the same with the net as of today.  With just about every device connected to the net, more money gets invested into provide these services.  Now you see more MP only games coming out.  You see more companies investing into build more cloud solutions and developing more robust infrastructure to service these solutions.  So to believe the net will stay static is not thinking about how things work.  When more money is invested by users in a space then more investors looking to make a profit will improve that service.  

Interesting thought and great question.  How much has been invested in infrustructure?  Most redditors have witness the cloud falling of the Amazon enviroment.  It does not take much to overload a neighbor hub on a street for an ISP.  Hence why they make a killing charging different amounts for different pipes.  I would love to see the cloud grow with amazing applications.  It already has.  JavaScript use to be nothing but a toy for developers in lower langauges.  Now it is considered one of the most powerful lanaguages out there to know. 

Still... Take the time to notice lag or drive 50 miles into the woods and lose cell phone reception in North America. The cloud is only as strong as its connection to homes and businesses.