Phil Spencer twitted this article, so I guess he approves. I've quoted parts but there's a lot more at the link. It's a great read.

Why Microsoft's new Xbox One cloud initiative could change consoles forever

Not too long ago, Sony and Microsoft laid bare the engines of their eighth generation consoles. CPU clock speeds and DDR3 Ram numbers were bandied about, GHz were brought to bear, teraflops flaunted salaciously. When the dust eventually settled and the media guns lay relatively silent once more, a fairly predictable treaty was agreed upon: to all but the most technically minded of consumers, there's little to choose between the raw grunt of the two machines. The company supporting each machine has its priorities, its foibles and its USPs, and we're discounting Kinect and the first-party exclusives, but in the on-paper battle of boxes, you can expect much of a muchness.

Except now Microsoft's John Bruno is now telling me that those numbers aren't the full story, and it might not be unfeasible that they'll one day become almost completely irrelevant. Microsoft, owner of one of the largest and most powerful arrays of computational servers in the known universe, is putting it to use on Xbox Live.

Now, says Bruno, that might all be about to change with advent of Xbox Live Compute, a service which "is specifically designed to enable game creators to utilize the scalable computing resources that Microsoft deploys within our regional datacenters, to enhance their game experiences beyond what is generally possible with the finite resources of a console."

What that means is not just convenience or multi-device access to content, but a significant extension of the power and scope which the Xbox One can offer developers and players. It means persistent worlds, improved AI, better rendering and dedicated servers for every multiplayer game on the platform. And it's all being offered to developers for free.

It's a tricky proposition, and aiming the advantages at those who are already going to be permanently connected is a canny way to get around it. Bruno tells me that "at launch the experiences will be predominantly multiplayer," but there will be more to come on the single-player side in the future, if the developers decide to use it. For now, however, it's going to be the blockbuster multiplayer games like Titanfall and Forza 5 which are going to be the big beneficiaries.

"I'd say Titanfall is definitely pushing on the additional computing resources, they're doing a good job of taking advantage of what's in the box and what's on the cloud".The Forza guys have done a really good job of providing a good multiplayer story as well as the AI technology for Drivatar in the cloud as well. So we've definitely had a great partnership from our development shops, both first and third party.

"We are giving this resource away to them for free, so there is a huge incentive to utilise it on Xbox One as much as possible. I don't think that game developers of that magnitude, the Activisions and EAs, are going to put all their eggs into that basket. I think that any good service infrastructure is going to pick and choose the way that they architect the system in the way that's most beneficial to them. I think there'll be cases where developers will want services that the Compute isn't designed for, things like database services or CDNs, things that are going to provide different experiences that are unique to the way that they want to build the game.

"We've even heard stories where the developers have had that and wanted to shut down games and servers over time and that really does disrupt their communities. One of the big advantages of our service is that it's completely on demand, so that as games wax and wane in popularity so do the resources that get applied to it from Compute. Providing that elastic scale at a really beneficial cost price point is a big benefit to developers."

Potentially, then, this could be something the effect of which exponentially increases over time. If there's the power to turn the Xbox One into what is essentially a terminal, streaming content processed on a different continent, surely this is going to extend the lifecycle of the machine tremendously?

"I don't know that it's true or untrue," Bruno admits. "I guess at the end of the day we believe that the cloud is going to augment the Xbox One experience pretty well and it's obviously going to get better over time. Does that extend the life of the box? Potentially, I guess we're going to have to wait and see."

http://www.gamesindustry.biz/articles/2013-10-15-the-difference-engine

The start of this article really shares my sentiments to how I feel about the hardware power -or lack of- and where the only hope lies for this upcoming generation. Finally an article that says it like it is and I couldn't possible agree with more. At least someone in the media is finally catching on about the underwhelming specs of these consoles and where the only real potential belongs.

The first developers that can provide gamers with games built on engines like Brigade through a cloud server, will be the first ones to actually show off next-gen graphics, physics and effects. Until now, nothing they have shown can be considered that. They have brought nothing new to the table out of the box. Nothing.

For the record Brigade developers also see it as a possibility for cloud streaming for the X1/PS4, and basically as the only way these consoles will run it. It still sucks the manufacturers didn't wait one more year to perhaps provide this type of power out of the box or at least Unreal Engine 3's SVO cone tracing tech, but if they can really pull off cloud gaming at low latency, then we might actually see some next-gen graphics and physics.

Well that sounds alright.

From when I played the Titanfall demo at eurogamer expo it seems like they were already including their cloud enhancement of in game AI units to kill labelled "grunts" if i remember correctly. Whats interesting about that is that demo was clearly running on a pc or a network of computers as a 360 controller was hooked up with a wire through a wall. So saying this would be something exclusive for the xbox one (I think I heard they said the cloud computing would allow for AI soldiers as a next gen enhancement when they were trying to justify the cloud when it was first getting flak) im unsure about, do they have all this code that theyre just going to "turn off" once they are done with it? I also remember them saying the xbox one version is going to be superior to the PC version of Titanfall due to the cloud enhancements of dedicated servers (if they dont have that on pc that would be kind of mind blowing) and this AI business.

Titanfall aside, a persistent world would be really useful and their flexibility in turning on/off servers if working well could help games have a longer tail end (persistent worlds could really help that fable game that is planning to come out)

"Cloud Computing" will not help graphics, physics or anything needing real-time computing because the latency between the console and the servers will be too great. Even then its all bullshit because since the console no longer requires an internet connection majority games will be required (unless its an online only MP Game) to be programmed with the idea that the console is offline first and foremost.

The only benefit I see from this magical cloud fairy is that we wont have to deal with client/host issues that plagued this generation, all games that have some kind of MP can have dedicated servers on call. Games like Dead Island and Borderlands I can see having the biggest benefit where they have a SP component that another player can jump in or be invited into instantly without leaving the current game.

Is this a reference to the book "The Difference Engine" by Neal Stephenson? Cause that was a pretty good book.

Weren't they going to drop the "Live" on their games division as well? As far as I know, it's the last part of Microsoft (that we can see) that still has that ill-fated monicker attached to it.

They really should.

Potentially, Could, One Day, Might.

"I don't know that it's true or untrue," Bruno admits. "I guess at the end of the day we believe that the cloud is going to augment the Xbox One experience pretty well and it's obviously going to get better over time. Does that extend the life of the box? Potentially, I guess we're going to have to wait and see."

Credit

this is just another set of Microsoft PR buzzwording and long game speculation, by Microsoft no less.

I'll give you a hint since you continue to ignore it: Cloud architectures are best used when software can disassociate data and computing time and result. It isn't about speed or power at all.

A prime example of this is a standard smart phone where both bandwidth and storage are limited. It turns out that modern smart phones actually have very good processors and great graphical capabilities so why would would app developers use cloud systems? It has nothing to do with "how fast it can go" but, to keep it simple for you to understand, Cloud systems never ever make client systems "go faster" but they do "work" for a platform that poorly handles it.

So you keep yammering on about this but fail to realize people have been doing this in games and apps for phones and PC have been doing for years. None of any of the posting you have been going on for months is new. Worst still you fail to grasp where the usefulness in the technology lies. No one claims their phone is faster or more powerful because they use an app that is driven by cloud architecture. No one claims their PC or Mac or Linux machine is faster or more powerful because they played an massively online game that is driven by cloud architecture servers.

Dude stop. Yeah it's about both speed, or latency, and power and I'm not sure what being "new" has to do with it.

Also you seem to keep making this argument that affects nobody and has no applicable or practical relationship to real life. Ray tracing algorithms were invented before the Atari came out, but that doesn't mean jack shit considering we are just now at the point where we can run them in real time. So I don't know why you keep harping on points for "new".

It's NEW for gaming as we know it. The end result of a console hooked up to a server that shares the computing effort, means you have a more powerful platform. In this case, the platform is console + server. Stop trying to rewrite or downplay this. It is what it is.

Wrong. Dead freaking wrong.

That's exactly what they're saying,. OnLive has been doing it for years. And MS's Azure has been demonstrated as a capable platform for this as well. That's what RENDERING means. It means your actual graphics and everything else to boot. They also have the capability to use it as a hybrid system, where only some things, such as physics, or AI, or just persistent worlds OR dedicated servers for multiplayer matchmaking are leveraged for compute. It's completely flexible. Latency is not the obstacle people think it is. Get informed.

...Actually latency is the obstacle people think it is and it is the sole reason that cloud computing as Microsoft is describing is a complete impossibility.

I already have 25 ms/p to my closest hop in servers this will add what 10 ms? 35 ms/p is horrible in a game specially when you add in the latency of the controller, So 40 ms/p would have stuff poping in every where and textures not loading quickly.

I'd love all this to be true but I'll believe it when I see it.

I'm skeptical about how efficient/practical the cloud will be compared to just having better hardware in the box, but something I haven't seen addressed anywhere is what happens to the games that rely on the cloud for graphics/content/whatever when those servers are shut down. Are we stepping into a generation of single player games that will all suffer the same fate as MMO's?

lol

Obviously nothing beats an R9 290x or a Titan in the box in terms of efficiency, but with a server, you can actually surpass even that type of power.

Azure is not a dedicated server in the traditional sense so the fear of getting shut down is basically tied to the fear of Xbox Live itself getting shut down. It's a general, world wide server that can be used for whatever game or service you want. It's dedicated for MS clients and services, or in this case Xbox Live, so as long as Xbox Live exists, it's going to be available for whatever game takes advantage of it, whether it's 1 million players or 10. They can spin up whatever resources you need.

Think of it this way. If one month you have 10 million gamers on peak, where 5 million are playing Call of Duty, 1 million Battlefield 4 and the other 4 is split up on all other games...and the next month those 10 million gamers are split across 2000 different games, that came out 3 years ago, with each game having a install base of 5,000 users....it makes no difference to Azure. They're still taking in their Xbox Live monthly fee. It might make a difference to whether or not MS wants to charge differently though on the developer end depending on game popularity.

Previously on PC, with dedicated servers such as for MMO they were mainly there to service that particular MMO or its sequel. So once gamers stopped playing, it was no longer feasible to keep it up and running.

@alexglass: Gotcha. Thanks for clearing that up.

Cloud computing is a hilarious term if it's applied to video game rendering.

Why?