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To get the best streaming solution you need to max your spend on:-
1. gaming rig but with a fast-as-possible H.264 encoding function (assuming Valve Steam will support it**)
2. a fast LAN; obviously ethernet is best (or should I say its the cheapest way to get the best e.g. Gigabit ethernet)
3. a streaming client which can achieve H.264 decoding (anthing can do this, even Raspberry Pi but that's another story!)
4. minimal response time of your display equipment (e.g. HDMI TV with a gaming mode?)
QUESTION. Are projectors as good as TVs with a gaming mode?
(**) In time Valve may support the many and various H.264 encode functions (whether in software or hardware). I don't believe that a single common s/w solution is best here.
I wouldn't be surprised if their first home streaming (beta) release only supported the GeForce GTX 650 (or higher) desktop GPU, this corresponding to their streaming work with nVidia and nvidia kitted out Steam Machine prototypes. But that's another thread too...
-Lag is supposed to be a non-issue over gigabit ethernet, right? Assuming the machine that's running the game has an adequate CPU/GPU.
-Compression seems like it would be the main culprit. If the visual experience isn't 1:1 then it wouldn't be worth the effort to display the image on a big screen.
-The only other thing that could ruin it is preventable problems like a bad user interface on the streaming end. Ideally you'd be able to select your settings one time and forget about them. The streaming machine could wake the host computer, launch the game, and show you a progress bar while you wait. It would be disappointing if you had to manually select "stream from desktop" every time.
Frame rate per se is not a bad thing, as compressed video tends to only send differences between frames. Videogames can be fast paced. Effects might take the whole screen and cause large differences everywhere. For example, on egoshooters, damage might be represented as a fade to red, and flash grenades might use a fade to white. This can make encodings hard to do.
Most movies-on-disc are encoded with at least two passes, with the option for an operator to assign bits on a second or third run, among other tasks part of the mastering process. With video games streaming, you do not know what will happen in the future, so bit allocation might be a hit or miss.
So, I will not be surprised if quality is worse than direct connection. Actually, Nvidia Shield shows a loss in quality. Let me quote Eurogamer:
http://www.eurogamer.net/articles/digitalfoundry-nvidia-shield-review
"We streamed BioShock Infinite and Tomb Raider from a GTX 670-equipped games PC over to the Shield. We captured both simultaneously, allowing us to bring you these image quality comparisons. While macroblocking is evident in the Shield image, the high PPI 5-inch screen hides most of the drop in image quality."
You probably should be worried about the low PPI 50-inch screen you might want to stream to.
Update: After all, there is a tradeoff between quality and convenience. Please have a read on Nvidia Shield review by Eurogamer, as it will point all the high and low points.
Still, it does seem like there's a lot of potential quality loss in the compression process.
And to answer grumpycrab's question about projector response times, some projectors have very little display lag. The Epson 8350 sits at around 30ms I believe.
http://blogs.nvidia.com/blog/2013/12/02/shield-experience-gets-better-still-with-latest-software-update/
Perhaps the main issue with streaming data is not how fat the pipes are but the cumulative (end-end) response time. There's a number of delays between a user clicking the fire button of their controller at the streaming client and the shot appearing at the TV.
PS. Do you mean 30ms? Isn't that dead slow?
Ps the 8350 has 17ms input lag which is apparently about 1 frame. Not sure if that cuts it for professional gaming but I've definitely never noticed a delay. I'm willing to make an imperceptible compromise for an= 100+" screen.