We don't have to theorize about this. We've had cloud gaming for years, and the companies have immense motivations to turn us all into renters in the cloud so they've poured a lot of effort into it and we can see half-a-dozen highly-resourced results now. We can just look at it and we can see that it... almost... works. If you don't care much about latency it definitely works.

However, Teardown is in the set of games where it just barely works and only if all the stars and the moon align. I'd characterize it as something like, cloud gaming spends 100% of the margin, so if anything, anything goes wrong, it doesn't work very well.

(Plus, as excited as the companies are about locking us into subscriptions rather than purchases that we own, when it comes time to actually pay for the service they are delivering they sure do like to skimp, because it turns out it's kind of expensive to dedicate the equivalent of a high-end gaming console per person. Most stuff that lives in the cloud, a single user averages using a vanishing fraction of a machine over time, not consuming entire servers at a time. Which doesn't pair well with "you spent 100% of the margin just getting cloud gaming to work at all".)