I actually had to splurge got 2 VCPUs on Digital Ocean to avoid "skipping ticks" and it does sound pretty nuts to me. We play max 3 players. I would expect the server with such a load to be able to run on a slightly tuned up toaster.
It is not cheap for the cloud. Had to use some beefy variety of EC2 medium instance for 4 players or so, with a simple dash for starting it up and terminating, I think using spot instance pricing. Otherwise it cost a pretty penny. At that point I did not use any performance mods, though.
to be fair with the power on most people's laptops and phones now I think we tend to lose track of just how little "1 CPU" is if you're not just running like, a small web app.
