Go to any GTA Online board and you'll see how many problems the oh so mighty cloud causes. If MS is smart, they'll sever their ties with this cloud mentality while there is still time. It's hard to pull a 180 after a console releases.
What's obvious at this point is that the concept of cloud computing looks uncertain and unlikely, and Microsoft needs to prove its claims with actual software Microsoft needs to prove its position with strong ideas and practical demonstrations. Until then, it's perhaps best not to get too carried away with the idea of a super-powered console, and there's very little evidence that Sony needs to be worried about its PS4 specs advantage being comprehensively wiped out by "the power of the cloud"..