@dan,

Very good point, but bandwidth will only increase as new technology and infrastructure is laid. Think of how far we've come in 5 years.

These guys might be a little early to the party, but this model looks to be a successful one, if slightly before its time. Can the company weather the storm before bandwidth makes this sort of thing more than feasible? Who knows, but I wouldn't count this model out -- not by a long shot.

For those users that are keen on seriously using this service, they will more than likely choose higher bandwidth plans. Currently, I suspect this appeals to casual gamers, and gamers that may only spend a few hours a day/week playing. Hardcore gamers may still opt to stay away due to the bandwidth costs, but may trickle in as bandwidth improves.

Anecdotally, I remember when Youtube was new and the concerns were similar for quite a few, and again so when they rolled out HD. But now, bandwidth more than adequately handles these tasks.

I'd give it time.