It stores in the cloud but it starts in your HDD. Are you going to devote 720p worth of your upload bandwidth to record videos while you play? What happens when your connection has issues, does it automatically choke down your image quality to compensate?
The answer is no. It records locally and then gets uploaded to the cloud. It does not record in the cloud to start.
Well, yea. It has to be stored locally initially but does it save it post upload? Do you have to upload right away after making the clip or can it be stored locally for editing and upload later?