They're about 5-10 years ahead of their time. I have no doubt this sort of thing will happen eventually, but not anytime soon.
Maybe in the US. I wonder why they didn't start the beta in Europe or Korea where most people have or can get really high quality broadband. Also, these areas are much closer populated than the US, which means that the physical distances to the server will be much lower.
Maybe they just wanted to solve the hardest case from the start, but it still seems strange.
Regarding the 80ms lag thing: I think it might be correct for most people. It includes the controller latency, network latency, computing latency and display latency. When you look at a normal multiplayer game, you might have a 20-30ms ping. But you'll also often have at least one frame (=40ms) display latency and some controller latency. So 80 ms for the whole thing seems plausible.
The question is if they can really guarantee this <80ms latency. The video suggests that they are aware of the fundamental technical problems and they claim to have solved them. But we'll have to see.
I am carefully optimistic about this thing.
One notable thing: the launch date given in the video is winter 2009. So unless it comes out today, this one will be late...
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