It seems to me in cloud gaming you could have a monstrous server with multiple GFX cards attached that could run the simulation and do the rendering for, say, 20 simultaneous users. If you were looking for a quantum leap in gameplay and graphics this is an obvious route, and Google would have been in a good position to develop it in terms of having cloud resources, systems programming talent, and money to throw at the problem.
(Of course, the idea that system programming > application programming is a certain way to get underperformance from systems programmers. Also, back when cloud gaming was fashionable, there wasn't any need to justify cloud gaming since all of their competitors were doing it. GFX card shortages were a gift to cloud gaming which is about to go into reverse.)
In response to your specific idea - I think something like that could be an interesting approach, but the difference between what the cloud GPU cluster can do vs an enthusiast-level video card would have to be massive - in a way that is both apparent and relevant to the average player. Obviously there would be an noticeable difference in the quality of rendering and overall simulation, but unless it's competently intertwined with the design of the game, I don't think a lot of players are going to care - outside of the "whoa, cool" aspect which is fleeting.
This is Google we are talking about, however, and they have advanced technology in their DNA. In fact, they are such believers in technology that a believer in games is going to feel unsupported at Google whatever they do.
If the goal was to produce exclusive games with the brand power of Nintendo then the Stadia studio was doomed. When it comes to games that are exclusive because of technology than Google had a chance and they could have demonstrated the concept, made a framework accessible to people who were better at games, and get patents to lock down the technology.
I’d contrast the Nintendo strategy to the Id Games strategy —- even though the ludic design of Id Games were superb they kept making the same game over and over again motivated by improvements in technology. It’s not the only or even the best way to make it in games, but is is the path Google rejected in favor of having no path. Cloud gaming really needed something like that because it needs to answer the question “Why?”
The game I’d point to for inspiration is Titanfall which showed what was possible with cloud-based simulation. At first glance Titanfall was just another shooter but it was fun for everyone no matter how good or bad of a player they were and was bigger and more tightly coupled than previous multiplayer combat games. I see a worthwhile cloud-based game being something like Titanfall squared for whatever genre it is based on.
Hah! Stadia G&E (games and entertainment) was indeed created and then subsequently shuttered down (https://kotaku.com/google-stadia-shuts-down-internal-studios..., https://www.theguardian.com/games/2021/feb/02/google-stadia-...)
Maybe you can't force a game studio to happen, you have to accidentally walk into it?
Are there any examples of an established company "breaking in" to the game industry and creating a significantly successful product? If so I would like to hear about it.
I feel like a lot of game companies that regularly release successful games have a difficult-to-quantify mix of experience and team cohesion. To the outsider executive it might seem like you can build this from scratch with the right budget, but I think it's a lot more complicated than that.
[0] https://www.bloomberg.com/news/features/2021-01-29/amazon-ga...