In a meeting attended by various industry folks, Microsoft showed off some of the power of the Xbox One stating that it has 10 times the computational power of the Xbox 360 and that potential becomes almost limitless when using the computational power of the cloud.
Xbox One's engineering manager, Jeff Henshaw, showed off a demo that used actual data from NASA to track the orbits and speed of 40,000 asteroids, in real-time, in its offline mode. Using the dozens of data centers and hundreds of thousands of servers that Microsoft has all over the world they were able to increases that number from 40,000 to over 300,000. The Xbox One was pulling in about 500,00 updates per second from their cloud computing resources.
While this sort of demonstration is impressive, Microsoft wants to show that the Xbox One in combination with the cloud will be able to handle massive gaming worlds. They stated that developers would be able to make worlds that are larger than ever before, that could handle hundreds of thousands of users in richly detailed environments without putting pressure on the console themselves.
Given the poor PR that Microsoft has gotten over the Xbox One's continuous online requirements, or at least the once per 24 hour check in, they really needed to make clear some of the advantages of that strategy and this seems to be a good start. If gamers know they will have a far superior gaming experience if connected to the cloud, they may not mind those online requirements as much.