I love how he claims its hacking and pirate proof, I give it 1 hour after the servers go live before the games are cracked and available on Pirate Bay.
As much as this is theoretically a good concept I just can't see it working in the real world where we have fair useage policies, limited bandwidth, contention ratios on phone lines and latency. Look at online games now, latency is the biggest single technical issue they grapple with, you expect that and even forgive them for it to a degree but you wouldn't tolerate that in normal single player games. This may work when you have your server and machines connected on a gigabit network but most people's broadband (at a guess) is probably in the 8 - 16 megabit range, which is far slower. Maybe when everyone is connected via optic fibre rather than the older copper line system and we have better services, until then I can't see it working properly.
And that's before we get to the problem of the servers the games are hosted on. Most servers are only built to crunch numbers and transmit/recieve data, there is no need for them to render graphics any more complex than their OS when the technician checks on them. This will put all of the graphics load onto them, not so bad when there's only a few connections but when you have hundreds or even thousands of people connected to each one the load on them will be enourmous. These servers will have to be all conquering monoliths of machines, and they'll be enourmously expensive, moreso than servers already are.
Like I said, its a good concept but that's all it seems to be, a concept, anyone who's ever worked in the technical side of IT could see the enormous problems this has to overcome before it could ever be a reality.