I think it would be helpful to broaden your horizons a bit. Everyone is talking about Stadia; whether it will be good or not, whether it will eventually see long-term success. These are very boring questions. The more interesting question is whether cloud gaming will see success over the long term.
Every major player, minus Nintendo, is entering or already in this market. Most notably, Microsoft is releasing xCloud very soon, and PSNow already exists. You can go play God of War, a PS4 game, on your PC, literally today (unfortunately, no Mac support yet). Its $10/month. No one talks about this!
Realistically, the cloud gaming market will become a utility, just like the cloud itself. Who can provide the most datacenters as close as possible to large customer bases? Who's technology provides the best user experience? Who is available on the most screens? These are all questions that multiple major players can have great answers to. Stadia was "early" (though, Playstation was the earliest, and its not even close; they purchased Gaikai in 2012 and OnLive in 2015, they're so far ahead that Google wasn't even thinking about this when Sony was actually selling it). But a player being early means nothing if this thing that Stadia released today is in the state that its in; they need years to iterate on it.
So, what will differentiate? The Games! This is the Hard Problem in this space. Not networking. Not DC locations. Games!
The choice isn't just "do I want to play RDR2 for super cheap with decent quality on Stadia, or in great quality but a $500 upfront fee on my X1X". There's a third choice there: Should I play it on PSNow? xCloud?
And, realistically, yeah its a very fluid market. I could play on any of them. But Microsoft, Sony, and Nintendo are destroying the third-party AAA game development space. Their first party studios are insanely good, seeing billions in investment and new acquisitions. They have proprietary world-class technology that they only share internally (example: the Decima engine used in Horizon: Zero Dawn was used for Death Stranding, and is widely considered to be among the most technically advanced engines in the world right now (though, Kojima isn't an SIE Studio, so maybe its a bad example)). Point being: if I pay for Game Pass on Xbox, and I'm a big fan of their exclusives, then RDR3 comes out and I can play it on xCloud, I'm going to buy that on Xbox. There's gravity to these platforms, and that gravity comes from the titles where I have to go to xCloud to play.
Phil Spencer, head of Xbox, has the most measured and strongest position in cloud gaming. At E3, he said that he sees it as just one avenue where people will play games. In some situations, it makes sense. For some people, it makes sense (though, those people like you will never play games as much as people who have consoles/gaming PCs). So, they will build it. They have the technology and DC footprint. But, Stadia's downfall will be in their all-in approach, combined with their lack of revenue strategy and lack of first-party exclusives to build gravity.
Unfortunately there's still the cold hard reality of latency (NOT bandwidth; not the same thing) and barring some sort of quantum breakthrough, latency is unavoidable and that's what renders the streaming gaming experience unpleasant.
Not to mention heavy-handed data caps in many places, unpredictable latency, etc.
I like MS's positioning here not just for cloud, but overall. I'd love a world where I can cross-play, cross-own, and cross-save across a console, desktop, and streaming. They are in the best position to profit regardless of how players prefer to play their games, unlike Stadia, which has an interest in muscling out other forms of AAA gaming because they don't have fingers in those other pies.
The only thing MS doesn't have a strong position in is Mobile/Tablets. Sure streaming can reach it, but mobile devices are now effectively pushing last-gen console level graphics. With wide spread support for PS4/Xbox controllers (iOS 13 supports them natively now), this is a pretty legit platform. If you're Apple, you're probably chuckling at the idea of streaming as the solution to mobile gaming when you're putting world-class silicon into users hands, most of which is underutilized.
Microsoft is hedging, because they're behind the two leaders (Sony, then Nintendo. Lets not get ahead of ourselves here). Whether they're genuine or have ulterior motives is irrelevant, but you should watch some of Phil Spencer's interviews; it feels very genuine.
Stadia's business model is identical to every other game platform's business model; percent of sale. So, to be clear about this; you're suggesting that Stadia can support a global DC footprint with massively expensive silicon and networking, off of the same revenue stream that Xbox, Sony, Nintendo, Valve, EA Origin, etc all already utilize, these companies who don't have infrastructure investments of the same magnitude or clearly plan to have a more distinct subscription category to support it? The economics don't make sense. They have options: sell ads, get rid of the free tier, create a pay-as-you-go paid tier based on time played, shut down, etc; but none of these look like the Stadia people are excited about today.
Microsoft also has first party titles. They own some of the strongest IPs in the history of gaming (Halo, Gears, Forza, Minecraft). They have the most powerful consoles. They run sales all the time. Doesn't matter; the X1 was the poorest performing console this generation.
Creating new gaming studios is difficult. Creating games is difficult. Creating great games consistently is a feat only a half-dozen studios in the world have figured out. Games that sell consoles generally come from creative teams with VAST cohesive industry and technical experience, not from new studios.
Halo 1, 2, and 3 were fantastic; then, Microsoft formed 343 Industries to build Halo 4 and 5, threw a billion dollars at them, and they were a shadow of the former games. Stardew Valley was made by ONE GUY with no money, and some estimates put his revenue between $50-$100M. Anthem was made by an insanely experienced studio (Bioware) with massive amounts of cash, a deadline 6 years out, and a proven history of successful titles; it sucks. God of War (2018) was made by an insanely experienced studio (Santa Monica Studio), with massive amounts of cash, a deadline 6 years out, and a proven history of successful titles, and it is widely considered among the best games released in the past decade.
There's no pattern to why a game will be successful. Its not about manpower, or money, or talent, or anything. Stadia Game Studios probably won't make anything capable of driving meaningful revenue in the next 5 years. Maybe they'll get lucky. They probably won't.
Every major player, minus Nintendo, is entering or already in this market. Most notably, Microsoft is releasing xCloud very soon, and PSNow already exists. You can go play God of War, a PS4 game, on your PC, literally today (unfortunately, no Mac support yet). Its $10/month. No one talks about this!
Realistically, the cloud gaming market will become a utility, just like the cloud itself. Who can provide the most datacenters as close as possible to large customer bases? Who's technology provides the best user experience? Who is available on the most screens? These are all questions that multiple major players can have great answers to. Stadia was "early" (though, Playstation was the earliest, and its not even close; they purchased Gaikai in 2012 and OnLive in 2015, they're so far ahead that Google wasn't even thinking about this when Sony was actually selling it). But a player being early means nothing if this thing that Stadia released today is in the state that its in; they need years to iterate on it.
So, what will differentiate? The Games! This is the Hard Problem in this space. Not networking. Not DC locations. Games!
The choice isn't just "do I want to play RDR2 for super cheap with decent quality on Stadia, or in great quality but a $500 upfront fee on my X1X". There's a third choice there: Should I play it on PSNow? xCloud?
And, realistically, yeah its a very fluid market. I could play on any of them. But Microsoft, Sony, and Nintendo are destroying the third-party AAA game development space. Their first party studios are insanely good, seeing billions in investment and new acquisitions. They have proprietary world-class technology that they only share internally (example: the Decima engine used in Horizon: Zero Dawn was used for Death Stranding, and is widely considered to be among the most technically advanced engines in the world right now (though, Kojima isn't an SIE Studio, so maybe its a bad example)). Point being: if I pay for Game Pass on Xbox, and I'm a big fan of their exclusives, then RDR3 comes out and I can play it on xCloud, I'm going to buy that on Xbox. There's gravity to these platforms, and that gravity comes from the titles where I have to go to xCloud to play.
Phil Spencer, head of Xbox, has the most measured and strongest position in cloud gaming. At E3, he said that he sees it as just one avenue where people will play games. In some situations, it makes sense. For some people, it makes sense (though, those people like you will never play games as much as people who have consoles/gaming PCs). So, they will build it. They have the technology and DC footprint. But, Stadia's downfall will be in their all-in approach, combined with their lack of revenue strategy and lack of first-party exclusives to build gravity.