I think this is one of those things that nobody expects that will be obvious in hindsight. Offloading rendering and game logic/AI to a massively parallel server network will allow MMOGs to break new ground in world complexity and persistence, and sell subscriptions to more people that can't afford dedicated gaming machines.

I think it would be doable for most current MMORPGS which aren't very timing sensitive so even if you have a couple hundred ms of lag it could still be playable (especially if the game is designed around this limitation).

VR however is one application where network lag would clearly be totally unacceptable. Can you imagine having even 50ms of lag while turning your head in a game? It seems like out of all the applications of "cloud gaming" this would be the least suitable one. It's not even about the game feeling laggy and floaty, it's about not getting sick while playing it.

I guess they could render a huge FoV for every eye and let the client do the actual tracking to mask some of the latency, but I'm not sure how you can make any translation work that way.

I'm not saying it's impossible and it'll never happen but if that's really the objective it seems they're doing it the wrong way around. Shouldn't they first develop "cloud gaming" infrastructure and then move on to the particular niche of VR?

Ah, yeah I was thinking more generally than VR. The R&D efforts at Oculus to reduce latency from GPU to viewport indicate that network rendering isn't going to work unless you anticipate and buffer the set of every frame the user could possibly require shortly ahead of time; technically possible for low-fidelity graphics I guess but very inefficient (although now that I'm thinking about it you would have to include all possible states of all non-static game assets as well, which creates a combinatorial explosion; I don't see how it could possibly work).

Regarding cloud gaming, Nvidia has a service in beta, but Amazon seems well positioned for a monopoly in this space (for both developer and consumer use cases) and I'm surprised they haven't been pushing hard for it. I've been using Paperspace heavily for cloud gaming for the last six months and it's a very compelling value proposition. All things considered I'd still rather have a dedicated custom PC, but I can't justify spending $2,000 up front for something that is already good enough at $0.60/hr on demand. You can imagine how big the market could be if instead of selling loss-making consoles you could just push a smart TV app that connects to a cloud gaming service and eliminate the console upgrade cycle. It would also be much easier to lure users from other networks if they don't have to invest $300 in a console to switch. I don't know if it would be a losing proposition for Microsoft and Sony but it could be an entry point for a leaner competitor to get a leg up on the incumbents.

Also, they can sell to "casual" gamers. Rent a character and just go. Don't pay for more than you use.