Just came across this interesting video on distributing multiplayer game processing across a network. Relates quite closely to what we trying to achieve on a current PhD project. Microsoft have demonstrated an example of cloud processing using Azure in Titanfall and other games but its not quite the same.
A prevailing approach by some leading games companies/publishers is to stream gameplay from the cloud, e.g. Onlive and Gaikai, in a technological approach that could be described as streaming interactive gameplay. The game is processed in the cloud and rendered gameplay screens are streamed to client machines. The advantage of the approach is that client machines do not have the so powerful and it may be more energy efficient (in global terms). An obvious disadvantage is that QoS and QoE is dependant on the quality of network. Shinra, a Square Enix company, recognise this issue but are building their mmo engine for a future (faster) network! Article here.