Latency is mostly a solved problem though when it comes to high speed connections though. Early when cable was released in my area there was high burst rates but bad latency - so back then I went with a dsl connection that had lower band width but better latency. These days though the latency is low enough on the cable connection in my area that I can play FPS perfectly fine.
From the article it sounds like the were able to play an FPS like Crysis just fine. FPS seems to be the gold standard, if you can run an FPS you can play any other type of game because they don't have the same type of split second reaction times.
It definitely sounds like an interesting system to try. I can't see how they could possibly stream HD content fast enough to make an FPS playable - but maybe that only works on a fiber connection.
> These days though the latency is low enough on the cable connection in my area that I can play FPS perfectly fine.
You're not talking about the same kind of latency problem that these guys face.
It seems that this service is sending the player's input to the server, and sending back compressed rendered frames of video. So, the soonest you can see any of your actions is the round-trip time.
Current FPS's do a tremendous amount of simulation on the client. Only state information is sent back and forth, and not everything is even in lock-step with the server. It's a completely different architechture.
Latency is only "solved" in modern games by hacking around things on both the client and server so that visual indicators are predicted on the client, and conflicting interactions(e.g. two players firing and killing each other simultaneously) are resolved by rolling back game state and examining the timestamps. It's unclean.
They're common in all games. Even if the ISPs got their act together (no sign of that) the stuff on the consumer's end is still a problem. Lots of ISPs distribute modems with significant problems. Lots of companies (Linksys, Belkin, and DLink come to mind as offenders) sell wifi boxes that are not only pathetically slow, but come with absurd defaults that make them even slower (Think 150ms+ ping on the wlan).
Not to mention the huge variety of brokenness that happens with PCs, which they're going to have to deal with (they have a client for Windows/OS X as well as the set top box).
To be honest, I would be amazed if latency didn't kill this project. Or turn it into a puzzle game platform.