StingingVelvet: Streaming is a hell of a long way away. Have you read about OnLive's user numbers? Been outside Western Europe cities?
With Microsoft working one it's own cloud based solution (if you believe the persistent rumors and the whole "
in five years consoles will disappear and be replaced by streaming" they keep repeating during interview.), Sony buying Gakkai and several others in development or already working, OnLive is just the tip of the iceberg.
IMO the biggest risk with cloud is actually the console makers, they are the ones that have the most to win with cloud gaming, I can easily imagine some offer like : buy the game on PS3(or 4) and automatically have it on your Gakkai account.
For publisher it would means that : the have their games on one of the main console, and without any extra work have their games on virtually any connected device, PC included, and they don't have to worry about piracy (impossible with streaming), they have less to worry about second hand sales (the "cloud" version being tied to an account), etc...
I am sure a lot would love something like that, it would also offer them plenty of new potential commercial model: pay per play, pay for save slots, pay for better graphics quality/details (similar to how several cloud based solution works where you pay for the processing power you are using), etc...
And for poor users : if you have a PC you have to buy the cloud version and if you don't have a good enough Internet connection then all that remain is the console version.
StingingVelvet: someone else would step in and take over as long as there is a market.
No not really, having a market is one thing, being able to take advantage and makes money out of it is another. You cannot create a new video card out of thin air, it takes millions (if not billions) of dollars and years of research to create one from scratch, then you need to manufacture it in high enough number to keep the price down. And even if you manage to do all that, if the market is limited nothing tells you will actually be able to make any profit out it.