Game state prediction doesn't cut it, or rather there's no point to it. The rendering is done server-side - remember they're streaming HD AAA games to televisions and tablets. There's always going to be a round trip between pushing a button and something happening onscreen. Google did say something about device inputs being sent straight from the controller to the server. Maybe this means they will cut down on latency between the input and the server, but it's still a trip back down from the server to the display on top of that.