Talk of speed is misleading in the internet, especially with satellite. While the upload and download speed might be considered "fast", especially compared to dial up the other factor that relates to gaming is latency. That is the lag I was referring to. Yes the signal is traveling at the speed of light. Compared to landline the speed is the same, speed of light but the landline will have a far shorter distance to travel. Then there is the bandwidth situation. In "peak" usage times you will be sharing the same chokepoint, the satellite. How much up and down can it handle and the downlink is another choke point. That bird has to transmit back to the ground into the sat system to transfer back to land line.
I checked out the latency, or lag, on a sat system for gaming before we left the house to go full time RVing. My DSL had great short latency playing America's Army. I hooked to my satellite modem and tried to log onto a practice server with no other players. I shot the wall and counted down how long the signal took to go up, down the return up and down to my modem. It was well over 2 full seconds before the hole from the shot showed up on my monitor. That means anyone on a land sine is going to see me and have more than 2 seconds to kill me before he shows up on my monitor to begin with. The physics of the system is going to kill you for gaming purposes. It's going to be fine for e-mail and regular internet usage that does not require lightning latency speeds.
Did you watch the video?
Of course, Elon talks a lot of baloney, but according to the video, the much lower alt the these sats will stay at pushes latency into the 20ms range acceptable for gaming. We'll see, but that is the claim.
Also, the future sats will be incorporating a glare-shield to prevent interfering with astronomical observing.
Also, the primary use case for this tech is rural users who have no access to ground systems, fiber optic or otherwise. So there current options are cell phone or the conventional sats your are referring to. So this system only has to be better than those to be successful. It was stated in the video (Did you watch the video?) that this is not intended for high population density areas that already have access to high-speed ground systems.
Then again, Elon talks a lot of baloney sometimes. We'll see. But a lot of money is already being thrown in to this so maybe it will work. I have some land out in the boonies I go out to where I have to use my cell phone. If I ever decided to try and live out there, I'd need a better system, so I'm rooting for them.