this is what they're using the cloud for... besides all the benefits of dedicated servers...http://www.eurogamer.net/articles/digitalfoundry-vs-respawn-the-titanfall-interview
Digital Foundry: So what are you actually doing with the cloud? It's more than just a dedicated server, right?
Drew McCoy: Right, so all the AI is server-side, the physics... Well, some of the physics are still client-side.
Digital Foundry: With the speed of the action, you can't wait 100ms to see something play out. So there's still an element of client-side prediction?
Drew McCoy: Oh yeah, you have to. Even running a listen server - you know, playing on a server you're running - on any game there's still latency between the server and the client and without prediction there's still a weird feeling of disconnect. Prediction exists no matter what.
Digital Foundry: So now you're fully dedicated.
Drew McCoy: Yes. It's fairer. It's faster. It reduces headaches with parties and matchmaking, you don't need to worry about NAT traversals, host migrations. It frees up quite a bit of CPU time. On a client-hosted game anyone can be the server so you can't assume we have all CPU and memory resources available for the client. So you have to say, OK we'll set aside whatever it is - one, 10, 15% of CPU time - in case they are the server. Now we know that the client won't be running the server at all, so we have all available resources.
Digital Foundry: Physics - what is tracked server-side and client-side?
Drew McCoy: There are various types. I think ragdolls are client-side as they don't have any impact on gameplay. If it has an impact on gameplay we'll want it to be server coordinated. If it's not, like shooting a Titan with a rocket and pieces of him fall off, we'll run it client-side.
and for those who want to read Respawn's full text about the benefits of Xbox's setup:http://www.respawn.com/news/lets-talk-about-the-xbox-live-cloud/