Voted legendary and now it's 2 votes in the lead; 49 to 47 against quickochet. So happy to see Waypoint/343i using polls and direct community feedback to decide vote variants or playlists. Well played and the iterative approach is getting better all the time.
Long post warning:
A few cloud speculations off the top of my head: (anything to add?)
1. No host migration & no black screen waiting while host changes. There is no host to quit out.
2. No interrupted game statistics, all your Waypoint statistics will be accurate and not inaccurate due to host migrations or host quitting etc.
3. More interactive maps as the synchronisation between players is easier with cloud/dedicated servers.
4. Faster updates to playlists/game settings, potentially even behind the scenes with no waiting to download updates by players.
5. Far less host advantage in game.
6. Improved regional player matching and therefore higher quality game experiences.
7. Far more simultaneous player per game e.g. 32 or 64 or 128 players in one match.
8. Coop play could reduce or eliminate input latency e.g. campaign coop or spartan ops or firefight could be buttery smooth while allowing far more detail in maps or interactive elements.
9. Seamless matchmaking like Destiny done in game in real time.
10. "Smart Match" background matchmaking as X1 advertise so you can do other things while searching for specific games/modes etc.
11. Potentially a custom playlist search or community published content in real time.
12. Potentially cloud processing of background AI, persistent or shared world(s).
13. Potentially cloud processing of graphics using a Level of Detail (LOD) system so things in use or on screen or close to the player or done on the console where all other things about to come into view or off screen etc are preloaded or calculated by the cloud.
14. Things like ghost players e.g. mario kart time trials or Forza Drivatar etc.
15. New game settings, tweaks, patches, content, maps, playlists etc can be added by developers in real time without the need for patches or download waiting etc.
16. Far less cheating e.g. no host bridging, no bandwidth throttling, no standby, no purposeful host quitting, anti-boosting/banhammer improvements etc.
17. In game ranks meaning far more e.g. statistics are far more accurate due to accuracy and reliability of no client host or host migrations or split games etc.
18. There is also potential for a hybrid system with cloud hosting and P2P (peer to peer e.g. Xbox Live on 360). This is being done with Call of Duty Ghosts and could likely appear in Halo as well. Just in case the cloud Azure datacentres and Content Distribution Networks (CDNs) aren't local to you it may benefit some international players to remain on P2P in place of overseas dedicated servers.
19. Automated clip saving in the cloud, save game sharing, access from multiple devices, game streaming to tablets or mobiles.
20. Spin off games like Spartan Assault or RTS that contribute in real time back to a Halo FPS multiplayer game e.g. Dust/Eve online.
21. Dedicated servers are just that, fixed into a location with specific resources, settings and geolocation etc. Cloud based systems to the global scale of Azure/Compute provide redundancy (no fall back playlists), scalable performance as needed and where (e.g. Australia get lots of players online at differing times/days to the USA and this will automatically be catered for). Servers don't need to go offline like Halo 2 PC servers as cloud scales up or down as needed.
22. Potentially shared party viewing of saved games or screenshots etc. Cloud or dedicated servers enable these sorts of services far better than P2P. So being in a party with 3 other mates you could watch your campaign or multiplayer game together without the slow loading or skipping of frames etc. This could be a real benefit.
23. Far more storage for saving or potentially editing game videos to the cloud. Again could access this from multiple devices or view with multiple people on multiple devices etc.