There's a few of other similar services: Parsec/Paperspace and Shadow
Latency with a good connection is usually sub 20ms roundtrip.
I use Parsec/Paperspace to game until Shadow gets unveiled on my region soon. I play Paladins (team-based multiplayer shooter) semi-competitively and I have no issues.
Yeah. The reality is that latency on the order of 50ms doesn't matter in games like Overwatch or Paladins until the very highest levels. Even Top 500 players suffer 80ms RTT to the server and they're still better than the other 30 million players. The game smooths over the latency by agreeing with your client when the state has diverged too much. Console players play fine at 30fps, even though "the pros" (often sponsored by manufacturers of gaming hardware) say that you will lose unless you get a 240fps and the PC to run that.
I personally think it's all pseudoscience. You can absolutely see that 60fps looks like a slideshow, but if you showed a game at 250fps and just used interpolation that didn't understand the game state, I bet the pros wouldn't even notice. For some reason, the monitor manufacturers aren't running those tests, though, so I can only speculate ;)
How this ties back into game streaming... yes, you will be supplying input based on the game state two frames ago. You'll be fine.
I played semi-professionally at one point in my life. A 20ms difference could be the difference between a head-shot and a miss. I used to work at an ISP and when I had matches or practice I would haul my computer to work and hook right up to our backbone to get that extra 20ms-40ms advantage.
One thing people who never played at this level don't realize is it's not just what you see. Your brain is always running heuristics and your body has muscle memory. You brain is also predicting where things will be and what you need to do next. The crisper and more responsive the game is, the more these things will line up and a quick flick of your wrist will put you in the right location before your eyes can even verify that this has happened.
To say you can't see more than 30fps or feel 20ms of latency underestimates how our brains and bodies work.
It depends on the game, of course, but in some games it really does matter. It's very hard to simplify things down to a pithy metric. That's the real problem, it's not pseudoscience, it's just very complicated.
It depends on the game... Overwatch has such generous hitboxes on weapons (other than hitscan) that it doesn't matter if you clicked where they were two frames ago... you still hit their hitbox.
Obviously there is benefit to reducing network latency, but it's really about the edge cases (being hooked out of ice block, dying after you translocate). While true that having your video delayed means that the game can't compensate for lag effects, I doubt it matters... if you had 0ms video latency you'd be hooked out of iceblock and die. With the video latency, you were dead before you ice blocked. Either way, you died.
In the end, I doubt people are reacting to anything within 20ms. They used information from 100ms ago to decide what to do, decided what to do and when, and then did it. A video delay won't prevent you from doing that. (More Overwatch examples: use Sombra's translocator to not die to the D.va bomb. You only have a few frames of invulnerability, but you have so long to make the decision to do it that even very low rank players can do it 99% of the time. When you switch to having video lag, you will still be able to do it, but you'll have to re-learn how. The latency doesn't matter, the fact that the game changed a little does.)
If you delay input for two frames, it's very noticeable. Mac OS X had 32ms mouse latency for years, and it was awful. It was annoying while using the desktop and obnoxious in games like Team Fortress 2.
I played a bunch of Arkham Asylum and DiRT 3 while using OnLive streaming, and the input latency definitely made some parts of the games harder than they would have been otherwise. I'd be hesitant to use streaming technology for any competitive game; you're handicapping yourself if you're playing against people who aren't streaming.
To be perfectly honest, it depends on the game. There are very few twitch games now where 2 frames would make a difference in competitive outcome. E.g. games like overwatch, paladins, smite aren't really twitch games so that delay doesn't make a huge differences. Or rather, other elements of skill far outweigh whatever small difference that delay makes.
You might have a case if you're talking about esports teams at the top tiers, but if you're that good, then you'd likely be able to make a living from it and would have your own gaming machine.
OnLive seems to have failed in part because of it's terrible latency, in the 150-200ms range. That's a far cry from 20-80ms which you can get on these newer systems.
Latency with a good connection is usually sub 20ms roundtrip.
I use Parsec/Paperspace to game until Shadow gets unveiled on my region soon. I play Paladins (team-based multiplayer shooter) semi-competitively and I have no issues.