Comment by BonsaiDen

Considering that pretty much all multiplayer games in existence perform some sort of local prediction / state interpolation to hide the lag on the local machine, cloud only multiplayer will be considerably worse. After all you can no longer hide the lag locally, since you're not computing anything on the local machine, so the minimum precieved lag will go from 0 (for movement of your own player character) to the RT between the datacenter and your PC :/