Cloud gaming , chromecast and virtual reality(which better fits pc's due their power) will pose big challenges to the xbox .
What do you mean by cloud gaming? Something like the Ouya or Steam's new device?
VR will be interesting. I'm not familiar enough with the hardware requirements to comment intelligently about that. I haven't done much with VR since the late 90s. Is the PS4/XB1's hardware not powerful enough to drive the kind of things that we're seeing the beginning of with Oculus Rift?
Cloud gaming is when games are run on a server and streamed to your home. Combine chromecast and cloud gaming, and you suddenly got a huge platform, with much more users than xboox one/ps4. And since it's google ,it would probably run android games which there are tons. This could make the platform preferable for AAA gaming.
One more element that could be important in this is microsoft's "project spark" which let users build games with amazing creativity and amazing graphics. It's still in beta , but when it's release it could be a huge force in gaming , especially together with VR.
I chose Witcher 2 since it was featured on the OnLive home page.
As the intro video streamed, I was impressed. It was smooth and the quality was good.
After the intro video, it all fell apart. The round trip latency on the menu screen was very jarring. Gameplay significantly magnified the latency issues. I felt like my character was drunk, trying to walk around even in the tutorial phase. I can't imagine how terrible that would be during demanding phases of the game. It really was terrible.
Maybe this would be useful for less demanding games, where latency isn't so crucial, but isn't that the whole point? A low powered device probably wouldn't need to outsource rendering in the first place if the game is slow enough that latency doesn't matter. Maybe I'm missing something.
Ironically, playing a few minutes on the OnLive trial made me interested in buying and downloading the real game via Steam, and made me never want to try anything on OnLive again.
BTW: sony will be also offering it , so maybe the tech is ready ?
I expect it to follow whatever path Netflix et. al. blaze. Depending; Moore's Law is very much alive, but doesn't apply to batteries. What's the attraction of a cheap tablet vs. a not quite so cheap capable tablet now, or a cheap capable tablet tomorrow, and how much will this depend on battery capacity?