Game streaming lets you remotely access hardware on the service's servers. You use a client to log into a powerful PC over the internet, and the games you play run on that PC instead of your own hardware. The client simply provides a live feed of the video and audio coming from the server hardware, and sends all of your inputs to that server to translate into gaming commands.
Essentially, you're controlling a computer that isn't in front of you, and seeing everything that computer displays.
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