I wanted to comment on this paragraph in particular:
JustNiz brings up good points in his comments about how VGX will be used for online gaming. I’ll be addressing at least some of them in an upcoming in-depth blog. Briefly, I think there are reasons to be optimistic. Not every change is for the worse, and I think it’s likely that users will see a better gaming experience in some ways. Servers will run games faster and much more efficiently. Developers will only have to write for one platform, meaning they can put more $$ into either making more/better games or reducing prices.
The downside to this approach is that it makes player mods much more difficult to build and deploy safely. While console players may regard this as no great loss, those of us who have been playing PC games for several years will recognize that this will inevitably lead to a loss in creativity. Off the top of my head, I can think of Counter-Strike, Team Fortress, and Red Orchestra as free mods that became commercial releases in their own right. id software's long commitment to open editing for the Doom and Quake series, Neverwinter Nights' editing tools, the Operation Flashpoint/ArmA series mission editors, Civilization's player tools, Unreal Tournament editors, and Company of Heroes editing tools all extended the viability and replayability of the underlying games.
Heck, entire genres were invented by players. Capture the Flag is just one classic example. It's a game style that shows up in game engines of all sorts these days yet it was originally just another player mod; Threewave's CTF for Quake.
All of this creativity is inherently more difficult to encourage as more technical control is taken away from players. I expect that if the economics of the proposed technology prove themselves, some game companies will take advantage of this format. I expect some will move almost exclusively to it. Frankly, I also don't expect that I'll be too interested in most of those games. :(
(Mine's the one with an old Quake 2 CD in the pocket next to the ArmA2 DVD.)