There is a difference between having a multiplayer focussed game be always online, vs needing your entire system being online.  Nobody who is playing multiplayer minds, because it's literally impossible to do it otherwise.  However, with a single player game, the restriction is unnecessary. 

I don't see the tech improving to where it needs to be that quickly.  With internet providers restricting internet speeds via price tiers, and continuing legal battles over net neutrality, and nations where internet access is still not ubiquitous.

Naturally I can be wrong, but I don't see streaming being a better option until more than ten years.

we haven't got proper full blown live TV streaming over the Internet yet but you expect gaming to go all streaming in the next generation? 

the audience for TV isn't only significantly bigger on a scale of magnitude that is even silly to compare them but the tech required is also a lot easier to implement and no one has to worry about latency issues. Yet, we don't have it. But you expect taht gaming will go that way first.....

I believe that next gen, some games will be made available for streaming in the same way movies go from cinema to disc then to TV. But it will not (anytime soon) replace or become the primary means of game consumption. Just too many things wrong with it. 

I may be playing the devil's advocate here, but the amount of people gaming vs the amount of people that watch tv is astronomically different. Smaller focused networks could possibly get away with it (and probably do), but a network like Fox, or AMC. A far cry from what any of the 3 major gaming companies would need.

Games will be supplied through energy drinks, bringing sensations from your blood directly to your brain. The more you drink the longer you game and better the graphics. Some energy drinks will have L-Wifi: Liquid Wifi, a form of wireless connection. I will have it patented.

Obviously we are nearing the end of graphical leaps. Not to say there won't be small things (and many at that) that may make gens visually look better, but nothing like previous gens as already been mentioned by the OP.

It's pretty much going to have to go outside the box.

There are still plenty leaps to make in lighting (real time ray tracing) and physics (materials interacting realistically). Plus we still haven't gone much beyond point and shoot as the primary way to interact with the world. Dialogue options will disappear in the future when natural language parsing becomes reliable enough.

Meanwhile tools to build games will keep improving, as well as procedural generation, which makes leaps in detail possible in open worlds. Imagine being able to go into every house and building in a GTA game.

No.

If you have an internet connection, then you can have internet based live TV. Just like things like the PSvue or that other one that's also in beta. It works the same way it works now. A provider pays for content, you pay the provider for a subscription just that instead of getting a cable box, dish...etc. you just get an internet connection. To the end user, it's the same thing. you are streaming video. albeit live video. 

The etch required to do that is a lot less than what will be required to have server farms of cpus and GPUs running 24/7 for 100s of millions of people worldwide to play 4k streams of games at 30-60fps. even if we lowball that number to say 100M that's still a ridiculous amount of hardware driving all that. 

For live TV, they only have to worry about content distribution over the Internet and through a snappy interface. For game streaming, you are looking at content distribution and real time content creation. 

lastly, the single most important thing about abgame console and games, is that in almost every part of the world you can just walk into a store somewhere and pick up a console take it home plug it to your TV and you are good to go. streaming games will never take hold until it's that easy to get a game running on a TV. everywhere. and let's not forget data caps. 

Maybe Good Games are the future?

What makes you think people are going to care about not streaming at 4K 60fps. People will be fine with 1080p 30fps for 90% of games, and that is an astronomically cheaper and more realistic endevor when given the same parameters.

As for data caps, if there will be anything that will push govenment intervention in ending them, it'll be game streaming. Data doesn't cost more money to maintain the more its used, so data caps are literally an unethical business practice, and it halts technological progression. Once a big financial player comes with demand for a product that needs unlimited data to thrive, data caps will be a thing of the past. That financial player is Sony, and if data caps don't go in like 5 years, there will be lawsuits, and Sony will either win them, or be accomedated, which will pave the way for Gamespy and the like to thrive.

Ok. so 4k@60fps is a bit much. But I was just trying to make a point. Even 1080p@30fps or hell 720p@30fps is a huge ask. Come on, think about it. 

What are the advantages of making gaming a dopt a stream based distribution model? Lower cost of entry, no need for end user hardware upgrades or purchases and that's basically it. 

Now let's look at what that really means. Lower cost of entry will mean a subscription business model. So we are looking at say $20-$30/month. That translates to $240-$360/year. and this is really low balling it. but let's say this means that now everyone can get in on it. Console gamers, PC gamers, mobile gamers.... everyone. Try put a number on that. You're looking at over 300-500M potential gamers easy. When all you need to play the best games possible is a display (be it phone,tablet, monitor or TV) and a controller that number may even be on the low side. 

can you imagine the hardware required to drive all that? can you even start to imagine the logistical nightmare it will be? here's an even more important question.....

Who do you think has the money to back all that? and even if someone does, how many companies do you think can fund such a service. Will it be centralized? on what OS will such a service run on. How willing do you think publishers will be to relinquish such power to one platfomr holder? How do they compete with eachother and differentiate themselves?

Game streaming is one of those things that sound good in forums or even on paper but in reality makes zero sense on the scale you are suggesting. I'm not saying it doesn't have its place. but it will never be the primary model of content distribution. If you really think it will, then I don't think you have really given it as much thought as you should. 

I see it being nothing more than a feature. You can stream your game from your console or your PC to any connected device you have. It's already starting now. It will also be used to stream older games to the few ppl that may be interested in them instead of tacking on full BC or as a means to generate revenue from those that would rather just pay for a subscription to play a couple of games every now and again. 

But it will never replace dedicated in home hardware. And for one major reason. When you buy a PS5/new CPU&GPU in 2020. You would have bought into $400-$1000 tech. $400-$1000 tech then will be infinitely more powerful than the millions of hardware units in servers that anyone will be able to afford to run a streaming service at the time. So dedicated hardware will always remain a generational gap ahead of streaming hardware if we are talking about streaming at the scale you are suggesting. To calrify this point, what I mean is that you or I may afford to spend $400-$1000 on the ahardware in our homes. But someone trying to make servers with 100M of such devices will not invest be able to invest $400-$1000 worth of hardware per unit. And that's just the hardware,we haven't even started talking about the manpower to run such a service. 

And another thing you aren't considering.... Right now, if I'm EA. I make 3 major $60 games per year. so I'm making $180/yr from anyone that buys my games. How much do I get from that $240/$360 yearly revenue generated from a subscription service? or do you really think anyone will pay $60 to stream a game???? Especially if it were possible to won the game and own hardware that runs the same game better.

I could go on forever, really. think about it.