It seems like the "obvious" way for Google to do this is to have a thin client with smarts instead of just a video terminal, similar to line editing and local e

It seems like the "obvious" way for Google to do this is to have a thin client with smarts instead of just a video terminal, similar to line editing and local echo in terminals (or Mosh's predictive input). The Chromecast is a smart thin client: when you play YouTube videos, it's actually running YouTube in a Chromium instance on the Chromecast, not streaming it from your laptop or phone, even though you control it from your laptop or phone. And with Google's experience in NaCl, WebAssembly, WebGL, etc., it wouldn't surprise me if they figured out how to ship enough of the game locally but still do heavy processing on the server. Of course, it's technically involved to make a local client for every video game they want to support. With local echo or even YouTube the scope of the problem is smaller.