Then how does something like moonlight, parsec, or Geforce Now work? Sub-10ms latency, sometimes even sub-5 depending on time of day and network congestion.
Ever heard of the Akamai network? Netflix might be a good example. Trace routes show latency between network hops. To reduce latency you either buy better network hardware, buy better cabling, or reduce hops in n the network. Since the first two are more expensive than the third, if your service must have very fast response between server and client, move the server closer to the client. Large corporations run cache servers in multiple data centers everywhere geographically so the response time for clients is better than their competition. Why new video services struggles to compete with YouTube is in part because YouTube can afford this kind of architecture where a startup cannot. Even if it’s the best code money can buy, it will never provide the same level of experience to users as local cache servers. Kind sucks not body can compete.
GP is talking about playing remotely rendered video games, so no caching here but yes distance to server indeed.
That is only ever theoretically possible with a direct fiber connection between both nodes at <= 200 miles between.
So the answer is “there’s a data center in your city.”