From a hardware standpoint, Xbox One is shaping up to be weaker than PlayStation 4, with slower memory and three operating systems that eat up a large part of the console's 8GB of RAM. But Microsoft doesn't believe it's outgunned. In fact, it claims that Xbox One can become massively more powerful due to the power of the cloud.

"We're provisioning for developers for every physical Xbox One we build, we're provisioning the CPU and storage equivalent of three Xbox Ones on the cloud," Jeff Henshaw told OXM. "We're doing that flat out so that any game developer can assume that there's roughly three times the resources immediately available to their game, so they can build bigger, persistent levels that are more inclusive for players. They can do that out of the gate."

That certainly sounds exciting, doesn't it? However, the folks at Digital Foundry doubt that Microsoft's claims will translate in the real world, with specific concerns over the limitations of latency and bandwidth. "Even assuming instantaneous processing thanks to the power of the servers, the internet is incredibly slow in terms of real-time computing," their report says, pointing out that while a 30 frame per second game would need calculations done in 33 milliseconds, cloud computing can take 100ms or more.

Microsoft's Matt Booty acknowledges latency, saying that "reactions to animations in a shooter, reactions to hits and shots in a racing game, reactions to collisions" wouldn't be possible on the cloud. However, he says that "there are some things in a video game world, though, that don't necessarily need to be updated every frame or don't change that much in reaction to what's going on."

Another challenge that cloud computing must overcome in order to have a genuine impact on the performance is bandwidth. According to Digital Foundry, PS4 allocates around 20,000MB/s of its memory system for the CPU. However, even with a broadband connection of 50mbps, that equates to only 6MB/s. "This represents a significant bottleneck to what can be processed on the cloud, and that's before upload speed is even considered," the report points out.

Given these significant hurdles, it seems highly unlikely that Microsoft's claims that their upcoming console can be greatly enhanced "by the power of the cloud" have any merit. Of course, there could be some demonic magicks being employed by Redmond--something that will require a practical demonstration (and not just PR talk) to dispel any doubts.