It will vary for every game i'm sure, but evidently for an open world game, like inFAMOUS : Second Sun, the CPU was the biggest bottleneck

http://www.dualshockers.com/2014/04/14/sucker-punch-seeking-more-ways-to-use-ps4s-ram-cpu-a-bottleneck-but-theres-room-for-improvement

That isn't something cloud computing is capable of at this point...

No, The Witcher 3 doesn't need much CPU power, it needs GPU power: http://www.computerbase.de/2015-05/witcher-3-grafikkarten-test-benchmark-prozessoren-vergleich/2/#abschnitt_7_cpukonfigurationen_im_vergleich

If I have this right (and please correct me if I don't), the issue with cloud assist on all levels of an engine is the double latency, sending info to the cloud (where you are in the game) and then the cloud assist sent back. Ergo, you have double the typical latency, right?

PS.  Right now the only way it can be applied is for predictable aspects of the game, has been my understanding.

You can make all calculations at location A (your console).

you can make all calculations at location B (PS now / OnLive servers) and then transfer the video stream to the client.

what microsoft is trying to do is making a part of the calculations at A and another part at B and combine them. but that is only possible for a limited type of calculations and the game and the game engine have to be programed from ground up to use these possibilities.

cloud computing ain't a magic wand.

Not directly. It can potentially increase frame rate by unloading peripheral computations to a server but you don't want it to handle functions where latency will be a problem.

I also don't want to see situations where this leaks into single player games without a good reason. It would just lead to all kinds of frustrations and increased development windows. Best to save this for multi-player games and modes.

I'm not expecting any significant improvements from the cloud but I'll wait to see the benefits. To answer the OP, if the cloud can benefit games then I'm sure MS will use it more provided it's not too costly.

 Cloud processing is realtime rendering. How does the game consistently render objects in the environment from a cloud, if it's not connected to it? 

It doesn't matter whether it's CPU or GPU rendering, the fact of the matter is that rendering more frames per second requires a faster response time by the hardware processing that data, physics requires quick reactions to calculate exactly where each portion of geometry will be because of the initial influence of say a bullet or something crashing into a portion of a scene.

Microsoft are yet to prove that the cloud can render even 30FPS when a player is sitting at home, running their XBox One, using the cloud servers miles away, even at Gamescom the servers could have been in the building, hell a PC could be packing over 20X the power of XB1 and be sitting on stage hidden away and an audience may not know.

60FPS requires each frame of an image to be rendered within 16.6ms, personally my latency on my connection is 123ms, that's something which is static and no tech provider can get around, unless you move the servers closer to the player.

It could be possible in a certain way but the game would have to be created in order to offer 60fps to those playing online and locked 30-45 fps for those not connected.

How I think it would be possible is simple. The reason you don't have 60fps in most games is because the games are jam packed will all kinds of effects, lighting, AI, physics, assets etc. Take a game that has less of these things and it would be possible to run at 60fps.

So How I would do it is let the cloud handle some of the effects that do not require a player input. Animation in the background, lighting, DOF, soma AI, some physics etc. Then because the console cpu doesn't have to handle all these things at the same time it has the extra ressources to render the game at 60fps. This is what I understood when they first talked about the capabilities of the cloud. If I'm totaly wrong feel free to let me know.