The Xbox One is a powerful piece of hardware with 8GB RAM, 64-bit processors and plenty more muscle. But as time passes this hardware will age. As Xbox One Director of development Boyd Multerer pointed out, "You'll still have a limited number of transistors in your house; in your box."
But the Xbox One is built to communicate with servers in the cloud to increase the computational potential of the system. Boyd continued "[As a developer] I can start doing things like shifting latency insensitive things to the cloud. You may have a limited number of transistors in your house, but you have an unlimited number of transistors in the cloud"
"We have an ever-evolving, powerful world [in the cloud] that we can tap into."
"This is not going to be as static a console as we've seen in the past," Multerer enthused.
Given that the Xbox One doesn't require an online connection, it's unknown specifically how game developers will be able to take advantage of cloud computation. One potential possibility is that only gamers connected to the internet with a fast enough connection will be able to take advantage of the computational power of servers in the cloud and experience an increasingly powerful-feeling gaming box.