OnLive is launching its MicroConsole on Dec 2, and the few reviews that are out are all raving about the little thing.
http://www.joystiq.com/2010/11/18/onlive-microconsole-review/
http://gear.ign.com/articles/113/1135364p1.html
Lag is apparently not an issue at all and unnoticeable. Compression artefacts are there, but no dealbreaker and image quality will steadily improve in the coming years with better network speeds.
It's easy to see the huge possibilities that cloud gaming could offer: when it becomes successful, big publishers like EA and Activision could completely by-pass the classic consoles from money sucking Microsoft and Sony by hosting their own cloud game servers and stream their Battlefield and Call of Duty (2014 edition) directly to consumers, saving a shitload of dollars in the process. They could even host their games exclusively in the cloud, effectively rendering the Xbox and PlayStation obsolete.
And when everything has moved to the cloud, path traced games could finally make a breakthrough and become mainstream, due to the greater efficiency and "unlimited" rendering power of the cloud architecture.
Good times ahead!
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