I investigated a service like this a year or so ago and found it seriously lacking. It may have been OnLive. At the time, resolutions would get no higher than 640×480 unless you paid through the nose, and even then, the usual issues with streaming applied. If these guys can actually pull it off, it would be cool, but I figure their revenue models will have no choice but to cause grief for gamers, whether by adding costs to games that you have paid for and may pay for monthly, or via advertising and such, or constant upsells for micro-payments. Those things already bug me.

If they can come up with a viable model and the technology is there to support it, it could be a groundbreaking thing, but I suspect we will need to see a few more iterations and a more solid move overall toward cloud computing before it becomes truly viable.

And bandwidth pricing models will need to change as well.