At E3 last week, in a behind closed doors presentation called Xbox 101, Microsoft engineering manager Jeff Henshaw - not a member of the PR team, he points out - tells a small gathering of journalists that Xbox One's 300,000 server cloud gives the next-generation console a unique advantage.

It's a somewhat abstract claim that Microsoft made first only a few weeks earlier during its Xbox One reveal event, and it's been dismissed by more than a few developers, including The Witness creator Jonathan Blow, as little more than a marketing trick. Digital Foundry's In Theory analysis concluded: "Microsoft needs to prove its position with strong ideas and practical demonstrations. Until then, it's perhaps best not to get too carried away with the idea of a super-powered console, and there's very little evidence that Sony needs to be worried about its PS4 specs advantage being comprehensively wiped out by 'the power of the cloud'."

Forza 5 will use the cloud to make AI with human intelligence, Microsoft claims.

Turn 10 Studios has discussed how Forza 5 will use the cloud to make more lifelike AI with "human intelligence", but I've struggled to imagine how Xbox One games would benefit directly. To Henshaw's credit, he does focus on what matters most: the games - albeit in prototype terms.

The pitch begins with solar system exploration, displayed on a huge TV and running live on a Xbox One connected to the cloud. The Xbox engineering team gathered an enormous set of data from NASA, covering the position and orbital trajectory of every celestial body of matter in the solar system as well as about 30,000 light years beyond it.

An Xbox One engineer rendered a subset of the asteroid belt between Mars and Jupiter, what amounts to 40,000 visible asteroids, which we see on the TV. The Xbox One's processing power is used to animate their orbital trajectory in real-time, all accurate to the current time and date of their actual position in near solar space.

Doing this, Henshaw insists, requires about 10 times the computing power of the Xbox 360. "We've crammed the horsepower of over 10 360s into this one elegant design that lets us do computationally insanely complex operations," he says.

Bigger is always better, of course, and that's where the cloud comes in. With the program connected to the 300,000 servers powering Microsoft's platform, the 40,000 visible asteroids rises to an eye-watering - and screen-filling - 330,000 asteroids, all being computed and rendered in real-time. This amounts to a whopping 400,000 updates per second from the cloud to keep each position of each asteroid current. It's an impressive, albeit bleak, display of virtual outer space.

But what's the point? How do asteroids, asteroids and more asteroids benefit the kind of games we love to play? Henshaw notes that as we move through the asteroid field, objects farther away skip a little. That's fine - they're in the distance, and so the program doesn't need to be as precise with them. For the asteroids nearby, however, the program needs to be "ultra smooth and ultra precise", Henshaw explains. The computing for the up close asteroids is offloaded to the cloud, keeping them moving smoothly.

"The cloud will enable developers to infinitely increase the size, scope and scale of gameplay elements." Xbox One engineering manager Jeff Henshaw

Henshaw says this prototype maps directly to the way next-generation game developers are building games, and, he says, some are even doing this now. Developers will be able to dedicate all of the local processing power on Xbox One to making sure experiences are snappy and responsive and reactive, but offload things around the player, such as foliage, an infinitely large world, enemy AI combatants or event real human combatants who are playing online from across the world, to "infinitely increase the size, scope and scale of any of those gameplay elements".

Henshaw adds the cloud will allow these games to persist in real-time because the cloud is always running and always available. So, if you leave a game it may persist with other players and feel the effects of time, wear, damage and weather so when you come back online it will have evolved.

In truth, for all the criticism Microsoft has rightly endured for its controversial Xbox One authentication policies, Henshaw puts forward a tantalising proposition. If what he's saying is more than marketing - and there remains a degree of scepticism on this point - Xbox One games could be made significantly better by something we can neither see nor touch, something intangible, unknowing and, therefore, alien. As I watch Henshaw's asteroids slowly move around the TV, I wonder how much better Skyrim's open world would have been had Bethesda been able to offload calculations to the cloud.

Certainly it's a concept we're not used to. Games have pretty much always been limited by local processing power. Not any more, Microsoft claims. But what do developers think? Henshaw says some are already using the power of the Xbox One cloud to help better their experiences. Which ones?

"The cloud, I don't know if we would have attempted something like this had we not had access to it." Titanfall lead artist Joel Emslie

Respawn Entertainment's multiplayer-focused Titanfall is perhaps the most high-profile example of a next-gen game that utilises the power of the cloud. It's an Xbox One, Xbox 360 and PC shooter that sees AI combatants fused with real-world combatants to create single-player moments in multiplayer. The game wouldn't have been possible without the power of the cloud, Respawn has said.

Speaking with lead artist Joel Emslie, it sounds like when Respawn talks about the power of the cloud, it isn't necessarily talking about the power of Microsoft's cloud, but rather the benefit of using its own dedicated servers in combination with the cloud.

"Phase one is you have a single-player world that exists in multiplayer, so you have a lot of AI that the cloud is really helping us with," Emslie says. "We're calculating a lot of the AI on that end. And we have dedicated servers. There's a lot of tough stuff with your NAT settings. We don't have to worry about that at all any more, so partying up is a breeze. Your NAT can be restricted if you want.

"The cloud, I don't know if we would have attempted something like this had we not had access to it," he continues. "In some ways we're trying to do something different, but it also really inspired the crew to see there's something here that's really powerful we can use. What could we do that's different with it, and how can we push that? We're just starting to scratch the surface with it. We're not even stressing it out yet. But the cloud gives us that. We started down a path with it, and it supports what we're ultimately after, which is a multiplayer campaign that's combining these worlds together with dedicated servers."

Digging deeper, Emslie says Respawn can calculate all of Titanfall's AI and physics on the cloud. "It's not peer-to-peer any more," he says. "We just wiped that away. In the past, when you were playing multiplayer games, you had to make sure the party leader had an open NAT. It was just this big hassle. We don't have to worry about any of that any more. It's fantastic. When I say the cloud I'm talking about dedicated servers as well and how they interact with each other. We're really happy with it."

"It might allow someone to use one dedicated machine just for on AI. What kind of AI could I do with that? That's interesting." Watch Dogs senior producer Dominic Guay

The Chicago streets of Ubisoft's Watch Dogs.

Former programmer Dominic Guay is a senior producer at Ubisoft Montreal working on eye-catching cross-generation game Watch Dogs. For Watch Dogs, due out later this year, the cloud has come too late to be used. But Guay dares to imagine how it may be harnessed in the future.

He says there are parts of a game that don't need to run at exactly the same refresh rate as inputs or graphics, for example, which he describes as "very close" to the gameplay.

"While we play multiplayer games there is latency. If you play a game of Watch Dogs with me, I know where you are and I see you, but there's latency in setting that position. So suppose you were an AI, and the decision to make you move was run elsewhere. There would be the same latency. If you think about it, it's not different than you holding the controller when you're playing multiplayer.

"It might allow someone to use one dedicated machine just for on AI. What kind of AI could I do with that? That's interesting."

Guay points out that his ideas are theoretical and must be tested before they can be considered appropriate for game design, but he's convinced there's more to the cloud than press release doublespeak.

"The way a tree reacts to weather, it's physics, right?" he says. "It's bending materials. Well, what if I could run that on the cloud? It doesn't need to be fully synced. There are occasions where there will be an advantage, but it's clear in the short term there's plenty of power within the machines. That's where our engineers are working."

"Our game teams will keep pushing two, three and four years into the cycle, and the opportunity to lean into even more processing power is only good news for gamers." EA Sports boss Andrew Wilson on the cloud

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Talking with game developers at E3 about he cloud, many confirm their games won't make use of it in any meaningful way, simply because it's early days. Call of Duty: Ghosts developer Infinity Ward isn't, for example. It's a similar deal for FIFA 14. EA Sports boss Andrew Wilson mentions FIFA Ultimate Team in the same breath as the cloud, but advises we wait a while before getting too excited.

"Do I think there will be more capability to use that in the future? I certainly hope so," he says. "Our game teams will keep pushing two, three and four years into the cycle, and the opportunity to lean into even more processing power is only good news for gamers."

Battlefield executive producer Patrick Bach says there isn't enough information on the cloud for developer DICE to use it for Battlefield 4, but he admits it's an exciting prospect in theory.

"In practise we're doing things in real-time," he says, "so you don't want to send an explosion up to a cloud, calculate it then send the data back down and then it goes poof. We still need to have stuff done in real-time, but I can see other things you could potentially do with it."

I'm not sure how the cloud will work for real-time stuff, but I can see how it could work for non-real-time stuff where you need a lot of calculations." Battlefield executive producer Patrick Bach

Bach says calculating AI in the cloud sounds "gimmicky" because "it needs to be real-time". "It doesn't matter if you send it up to a cloud and it takes only a second, it's still a second too late. I want it the next frame."

Rather, Bach says cloud computing will be effective for calculations that would otherwise be slower on a local computer. "But real-time and cloud to me sounds right now very tricky. I haven't seen an actual application for it. I'm not sure how the cloud will work for real-time stuff, but I can see how it could work for non-real-time stuff where you need a lot of calculations."

In the wake of E3 and its hundreds of announcements, Xbox One's cloud remains a murky, troublesome concept. What happens if your internet connection cuts out? Do physics and AI suddenly act dumber? How will the various versions of multiplatform games differ because of it? How will the Xbox One version of Titanfall differ from the Xbox 360 version? Who's going to pay for all of these servers? Publishers? Gamers? And what of the PlayStation 4? Will Sony offer a similar "power of the cloud" pitch, perhaps fuelled by Gaikai? Microsoft's solar system prototype helps us better imagine how games may benefit from the cloud, but it seems we'll have to wait a couple of years before its power manifests itself - if at all.

"I can spin up 10,000 virtual servers per host. They would just all suck. Saying 300k when they are virtual is a lie." The Witness developer Jonathan Blow

Some see no need to sit on the fence. The Witness developer Blow took to Twitter to criticise Microsoft's 300,000 servers claim. "I can spin up 10,000 virtual servers per host," he said. "They would just all suck. Saying 300k when they are virtual is a lie."

At the end of the Xbox 101 presentation, Henshaw is asked whether the 300,000 servers that will be available when the Xbox One launches are all physical servers or a combination of virtual machines. "We haven't gone into that level of detail yet," is all he'll say, somewhat tellingly.

"Game developers are some of the most creative people on the planet, and they create games with requirements to light up some of the most brilliant, imaginative experiences," Henshaw concludes.

"Sometimes those will work totally fine locally. Sometimes they will go beyond what an individual device can do to use the cloud. But different games will have different requirements and different behaviours based on the imagination of the developer of the game."