I can't be sure from the article, but it looks like this is a different approach to gaming. Normally the code and data for the games is sent to your device, and then your device runs the game logic, renders the graphics, and outputs the video and sound, sending data to central servers for multiplayer gaming. This service takes data from your controller, sends it over the network to a server, runs all the logic and rendering there, then streams the video and sound back to your device.
This is a radical change that has lots of serious implications if it catches on.
- Your local CPU is no longer important
- Your local GPU is no longer important
- Your local OS is no longer important
- Network latency is much more important
- Network bandwidth caps are very limiting
I expect Google will be able to encode the game video in a number of different formats, enabling streaming to many different devices. Doing this in real time is a nice trick. Eventually they should be able to support multi-monitor setups and other interesting configurations.
Network latency and bandwidth is critical to online gaming as it exists today. Google moving the heavy lifting to the server side doesn't change this. Online gamers have been dreaming about this the last 10 years. No more video card upgrade, no more memory card upgrade, no more overclocking the cpu, no more headache about building the best gaming rig on a budget, etc. Now if Google can host, my favorite game, americasarmy I will be stoked.