“The power of the cloud” was something that Microsoft heavily pushed for back with the Xbox One’s original debut, when their vision for it was an always connected, always online system. Of course, as we all know, that promise ended up coming to nothing. The reasons were manifold- but the key reason was, internet and bandwidth infrastructure to accommodate cloud gaming simply does not exist right now.
That said, it could still happen one day in the future, according to Xbox boss Phil Spencer- though, he adds, even if it does, local console gaming devices will be key to Microsoft’s vision for the future of console gaming. This was something that he shared in a Twitter exchange with fans.
It is something I can see- I think that if cloud gaming were ever to actually catch on, it would be as a supplement to existing local console gaming, not as a replacement for it. Ultimately, no matter how much we reduce latency, it will never come down to the absolute zero latency that local console gaming can afford us.