Not at all. Not even in the slightest. Whats funny about statements like this is how baseless they are. Do you realize that smartphones have more in common to a PC than a console? If you insist with a smartphone ypu can actually fully replace your PC or laptop, they even do more than a console does. They are refreshed eveey single year almost without fail, command prices more inline with an average PC, yet we don't see people saying smartphone buyers are PC buyers. 

A console ia still a console, a refresh every 3-6yrs doesn't male it like a PC in the slightest. A console only really becomes like a PC when you can walk into a store, change your Ram, Hard drive, CPU and GPU. I just don't see the connection at all.

You are right and wrong at the same time :).

Lets break it down to the basics. Using a PS4. For a game to run on the PS4, it needs 6 CPU cores and an 18CU GPU with ~5GB of GDDR5 ram. This is the app allotment in hardware for all games built for the PS4 to work. Now even if you take out the 2 2CPU cores and eveeything else need to run the other background tasks the PS4 runs, you still need at least what i memtioned earlier in your "virtualized machine" to get it to work.

Now even if you have highly specialized virtualization machines that can each run 2-3 instances of the PS4, you still need them to either exactly have the aforr mentioned minimum hardware or at least something that is so powerful that it can emulate it. Either way, thats a lot of money. 

There really is no way around this, no virtualization machine is less powerful than the core hardware its trying to emulate. Its just impossible. 

If you want to strip what it takes to run an instance of a PS4 game down to its core, you need 6 CPU/ 18CU GPU and 5GB ram then multiply tjat by how ever many millions of people you intend to be able to play a game simultaneously (or its equivalent). Selling hardware directly to users would always be cheaper and more efficient than that, especially when you stand to make a profit from selling the hardware to begin with. 

I belive game streaming will always be a backend option. A way sony or whoever else can repurpose old obsolete hardware. They will never put PS4 level virtualization machines in a server somehwhere when they can sell that hardware directly to an emd User, but when the PS5 comes along, and no one is biying the stock PS4 anymore, they can get them back and throw them into their servers.... 

Even at the most basic level you have to understand that no one plays their PS4 around the clock, most would play in the evening which handily enough rotates around the globe daily! so only one time zone is a peak user of hardware for a SAAS cloud service like this. Proper server management would not mean having the power of the number of users of the service all at once, that would be insane.

Of course, but its not that simple. 

Say you start a streaming service. And you have hardware that can virtualized 1M consoles. Of course at the beginning you don't expect your all 1M slots to be taken up simultaneously at all times. So you can issue out 2M subscribers which are covered by your 1M slots. 

When you subscriber base goes up to 5M, you need to increase those slots to at least around 2.5M and hope you don't release any one game that everyone in that one territory wants to play at once. 

And that's all just one territory. 

Then consider that such a subscription service will have a much much much lower price of entry. Probably something along the lines of $30/month at its highest.That unfortunately means your adoption rate is going to be a lot higher. Especially around those months when games like uncharted are coming out. 

Bottom line, you can't just lowball it and there are tons of variables to consider. You also can't afford to have people pay to play games and end up with a sub par expericne. Whatever the case, if you at any point have a user base of 100M people, you can't make do with only 20M slots. And with something that requires a very low price of entry, you will get to that 100M really quickly. 

This isn't like Netflix, the hardware required to drive games is waaaay more complex and expensive than whats required to drive video streams exclusively. This is like having Netflix and something else entirely that's way more expensive than Netflix ever was combined. 

Here in lies the mistake though, if you have a global number of players who wish to play a game on their peak time of 6-9PM you are talking about a window of usage which covers just 1/8th of the planet at any given time, while it's 7pm in EU its unlikely the midday gamer would be as active in the US or the 2am gamers in Japan. (approx didn't work out exactly but the point stands).

You are talking globally, and you are talking about playing games like uts somethung nost people do for an hour or two at a time. 

Rather than we keep going ove this, picture it this way. If you you have an sub base of 40M in NA alone, how many virtualization machines would you need?

You are talking globally, and you are talking about playing games like uts somethung nost people do for an hour or two at a time. 

Rather than we keep going ove this, picture it this way. If you you have an sub base of 40M in NA alone, how many virtualization machines would you need?

A sub base in the US alone which would compare to the global sales of the PS4, that would be absolutely mindblowing, I can't give you a number though but the PS4 is not a powerhouse in terms of power though, it performs its duty really well but in comparison to some PC enthusiasts machines here or even the PS3/X360 when that launched it isn't a super computer in the slightest.

I mean even in terms of the memory the system has, sure a massive 5gb of GDDR5 is great for a game... but you gotta look at it from the point of a PC virtualization server... Windows Hyper V Server 2012 had a limit to RAM of 4TB ya know... 4 Terabytes for a single Virtualization server or 819 times the memory of a single PS4 and that was the previous generation of windows Virtualization server I'm not even sure what the limit is on Server2016 nevermind a custom build which would be used for something like Gaikai if you think a company would use 40m servers for a sub base of 40m PS4 level of systems I'm just at a loss really.