Cloud-based system using video compression for interactive applications

A server interactively serves client applications and client applications make estimates until updates are received from the server based on user input from the client. Processors on both the server and client execute applications with images. A video encoder in the server estimates images in response to the client user input and forwards a compressed data stream to the client. A video decoder of the client obtains images from memory and estimates images and reconstructs images from a compressed data stream in synchronization with an encoder of the server using the user input. A client display displays a region from memory of the one or more estimated images.