Many concepts of computing have moved to the cloud, but gaming has not been one of them. Even with the fastest pipe into your home, latency is inevitable, and who wants to die in a "Call of Duty" deathmatch because of lag? We get enough of that as it is with the software loaded on our PCs.
Cloud-based gaming would also help overcome the problem of console hardware because it would require just a thin client to display the game rather than hefty hardware to render it. Displaying the video is a lot easier and less system intensive than having to render each frame. Given how underpowered the Xbox One is, cloud-based rendering would help overcome its shortcomings.
But how do you get the rendered frames down the pipe to the gamer quickly? Microsoft Research may have a solution in a project called DeLorean. In a nutshell, it renders frames before an event occurs in the game based on a number of variables, the correct set of frames are sent down to your device.
A recently published white paper from Microsoft lays out the concept and solution. Microsoft notes that people could enjoy high-end graphics without needing a high-end GPU through cloud gaming. However, cloud gaming is hindered by latency as low as 60ms.
Microsoft calls its solution "speculative execution." It uses future input prediction, which is predictable based on player behavior, along with speculation of multiple outcomes and error compensation. Microsoft also came up with a new form of bandwidth compression that uses the speculation component to take advantage of the frames being similar from one to the next.
With this, Microsoft was able to achieve a playable cloud-based version of "Doom 3" and "Fable 3," both of which are framerate-intensive games, that were easily playable on thin clients despite a latency of over 250ms. Microsoft found players preferred DeLorean over traditional thin clients and that DeLorean can mimic a low-latency network successfully.
So when will we see it? Like with other Microsoft Research projects, they give no release date. This is still a lab experiment. But it could herald a day when gaming, like Salesforce's CRM, is a SaaS experience rather than 5-10GB on your hard drive.