Fully cloud or a cloud local hybrid will eventually take over for AAA gaming and I think personally that its inevitable.
We have already seen a glimpse of the future with flight Simulator. One of if not the most ambitious titles ever, full earth scale, realtime air traffic, realtime weather and time of day. This game would simply not be possible to work fully offline and unless you stream in assets from the cloud on the fly you don't get the highest graphical fidelity. The best possible way to play regardless of the cost of your rig is to use the hybrid local/cloud option, to fully download it (if there was the option) would take petabytes of storage. This is the start of things to come where we will see the top developers using massive scale simulations or massive scale asset libraries fundamentally under pinning their games. You want better AI NPCs that are more human like and unpredictable, run them in the cloud, you want rich life like environments that change over time naturally then do those heavy calculations in the cloud. With flight sim we are already at a point where the best experience in the genre is reliant on cloud streaming and that is going to become the rule rather than the exception as time goes on. There will always be a place for fully local native hardware but if you want to play the very latest cutting edge, innovative games then the only option for a lot of those experiences in the not too distant future is going to be at least in part by having a cloud streamed element.
Think of it like how the Internet has changed how school children investigate things for projects or homework. When I was at school there was no internet and we had to go into a library and get info out of the huge resources of books they had. There was no way that anyone could have had their own library at home with the same breadth of information. Even with the wealth of information that a library had it still always felt out of date for me trying to look up things like earthquakes or other natural disasters, science material that didn't have the latest innovations etc. Sure, the libraries would get a steady stream of new books coming in but no matter how fast they got them in it would never keep up with what was going on in the world. Fast forward to now and the Internet provides not only the same functionally without having to leave the house but also has the advantage over libraries of been totally dynamic, changing and updating over time. You could if you wanted download all the information you will need to complete your education and store it on a drive for reference but no one does that because once you download a page it's then static and never changes or updates while taking up potentially huge amounts of space. People take the Internet for granted, the fact that it updates constantly 24/7 but when you step back and look at how things are now compared to pre Internet is phenomenal how it's revolutionised our lives. People will look back at gaming in a similar way and think how weird it must have been when we used to buy a game on a disk and that game would be set in stone and never change. We have the situation now with constant patches, updates and ballooning games sizes which no one likes, I see this as just an interim to a future state where games are dynamic and are constantly being updated and changing on the fly in the background, seamless and instant. Sure you could download these updates but there comes a point where to increase the scale and complexity of a game it becomes impossible to do that using current methods and makes way more sense to do all that in the cloud and stream it in part of in full.
A lot of people arguing here that cloud streaming will always be inferior are failing to see the unique advantages that this method brings. Just imagine the innovation that could be done with games by having elements that are cloud native. For example a single NPC (out of thousands) in an RPG that runs like a sophisticated chat bot on a dedicated server cluster that can respond in a more natural human like way and can learn new information over time based on any number of factors either fictional or factual . An NPC that would behave slightly differently each time you visit them, an NPC that each player would have a different experience with. Scale that concept upto a full game and you have something incredible and something simply not possible in a standard downloadable feature complete game install.
Going back to my flight sim example, I no longer have the game installed locally as I don't see the point. Even though I can install it and use hybrid streaming for environment assets I am happy to play it fully streamed and not worry about the huge install footprint and sizable updates. The experience I get from streaming is good enough and the advantages I get from fully streaming it outweigh the advantages I get from installing it.