it's stupid to think the cloud thing will work well. if your internet drops at all your graphics will dial back dramatically. there is only so much you can do server side with the high latency stuff. if you want to run your game on the cloud it would be like sending data of what you need over the internet, the server processing it, and sending it back for your console to read in less than 33ms,
go to speed test.net and test your internet remember speedtest is usually much better off than it is in reality for you I have pretty decent internet and I usually get 20-25ms and this doesn't include any server side calculations at all.
33.3ms = 30fps btw even with my internet it would be impossible to use the cloud for 60fps gaming (which needs 16.7ms connection) MS is just blowing smoke about what the future might hold and trying to make their console not seem as weak.