Google Stadia is not long for this world
Google has no actual competitive advantage here. No one will find Stadia's lag acceptable if they find the lag on other services unacceptable. The cloud advantage was one of the main pillars upon which the Stadia business was built, and there just isn't any evidence that this theoretical benefit is working to Google's benefit in real life. Nvidia isn't even a cloud company, and it can at least match Google.
You can’t outrun the speed of light. Gaming is a highly engaging medium. The instant feedback between the input and the game is what allows players to settle in to a flow state, feeling as though they are directly controlling the game. I would liken input delays in games to those “voice jammer” apps that replay your voice back to you on a delay while you’re talking. It just gums up your ability to perform normally.
That’s not even getting into the issues with ownership and whatnot.
There is, imo, no path to victory in the AAA game streaming space. You can at best make some neat tech demo, and maybe even sell it to a small audience who can deal with the lag for a subset of genres, but you’re not going to displace consoles, phone games or computer gaming any time soon with that.