They're flogging this not because it works over the Internet. They're flogging it as an "antipiracy" play- and the game publishers are the same crowd that're doing the same insanity over "piracy" in the Music and Movies/Video space.
Here's a hint: Unless you've got the sort of link I have at my house, this will plain-flat NOT work because the speed and latency will not even remotely be there for you.
Forget DSL unless you've got a business link.
Forget consumer FIOS or similar. You're sharing the ATM backhauls with other people.
You will need to shell out $100-200 a month, minimum, for a business service, fixed IP set link to FiOS or similar at 5+ MBits to get the thing to have the same performance that they're showing at GDC right at the moment- and that's for the low-fi play. You'll need the 20Mbit symmetric link I happen to have just to realistically do the Hi-Def one over the Internet- and that is if you don't have issues on the backbone you're sitting on.
And this doesn't even get into what kinds of pipes the game company is going to need to provide service Add it up. It's not magic. An OC-12, which is "godlike" bandwidth in most people's eyes, can only sustain 415 simultaneous sessions to and from the server pool at LOW RES, it's roughly 83 of them at Hi-Def. That's over 600MBits/second. This sort of crap breaks companies REGULARLY, even in this day and age.
I've researched video compression tech for a long time.
I've researched network performance and latency for a long time.
I've held down jobs collecting the data from 8 primary securities trading markets daily- the full trading volume brutalizes OC3's effortlessly. This would savage an OC-12 like nobody's business.
I've been the CTO of a set-top box company trying to do on-demand video, etc. for years. 1.5Mbits of "low-def" video compression's nice, but it's not much different than MPEG4 rate with a few other things tacked on. I wish I had it back then- would have made a store and forward caching system for that sort of thing viable back a few years back- I would still be the CTO for the company, now effectively dead, as they'd have had quite a few customers in hand.
This is someone trying to make a play for investor money and bilk them out of it. Seriously. You can discount what I'm saying here, but in the end, what I'm remarking on is the brutal reality of what they're claiming and everyone's twittering about here. It's not magic. It won't do what you think it will.