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From what I’ve read, a common model for mmorpg companies is to use on-prem or colocated as their primary and then provision a cloud service for backup or overage.

Seems like a solid cost effective approach for when a company reaches a certain scale.

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Lots of companies, like Grinding Gear Games and Square Enix, just rent whole servers for a tiny fraction of the price compared to what the price gouging cloud providers would charge for the same resources. They get the best of both worlds. They can scale up their infrastructure in hours or even minutes and they can move to any other commodity hardware in any other datacenter at the drop of a hat if they get screwed on pricing. Migrating from one server provider (such as IBM) to another (such as Hetzner) can take an experienced team 1-2 weeks at most. Given that pricing updates are usually given 1-3 quarters ahead at a minimum, they have massive leverage over their providers because they an so easily switch. Meanwhile, if AWS decides to jack up their prices, well you're pretty much screwed in the short-term if you designed around their cloud services.

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