Not necessarily in my experience! Most games don't hit the CPU particularly hard.
Mostly reliant on (hardware offloaded) network latency, memory, and storage. Consistency being the thing of most importance. A spike is felt - interpolation can only go so far
CPU virtualization extensions make the latency cost of VMs hardly noticeable, containers are technically better but it's a split hair.
On an unloaded host and a single VM you can achieve essentially identical performance as bare metal - the CPU extensions, pinning cores, and huge pages are key
Some performance metrics even improve! Disk operations tend to do better from an added layer of memory involvement
Edit: there are options for multi-tenant fairness whichever way you go -- Bare metal, VMs, or containers
Performance isn't much of a worry, more so the 'handles'
Mostly reliant on (hardware offloaded) network latency, memory, and storage. Consistency being the thing of most importance. A spike is felt - interpolation can only go so far
CPU virtualization extensions make the latency cost of VMs hardly noticeable, containers are technically better but it's a split hair.
On an unloaded host and a single VM you can achieve essentially identical performance as bare metal - the CPU extensions, pinning cores, and huge pages are key
Some performance metrics even improve! Disk operations tend to do better from an added layer of memory involvement
Edit: there are options for multi-tenant fairness whichever way you go -- Bare metal, VMs, or containers
Performance isn't much of a worry, more so the 'handles'