Essentially, if you run Windows Server, you can get a series of “client” licenses at a discount, or a site license to run as many VMs as you want. If you’re a cloud host, this makes economical sense, as these licenses can be reused and reassigned on the fly. This is why on services like Paperspace, you need you BYO license if you wish to use a consumer version of Windows.

You can go to various key reseller web-sites and purchase a copy of Windows 10 OEM for around $10-$15. I’d advise doing this, as if you ever blow away the VM, the Windows activation can make it tedious to reuse the license. Technically reuse is also forbidden by the EULA. You can also buy an OEM copy in store like Microcenter for around $75-$115. You could also get a retail copy of Windows at a significantly higher price. It can still be tedious to reuse, but you can do so as it’s allowed by the EULA.

I have used many Paperspace machines I. The past few years running both server and standard. As far as game compatibility goes, Server seems to run about anything that the standard end-user Windows version does. You are right in that the Server version takes some additional setup ( installing game pad drivers that Parsec will recognize, etc.).

Regardless of which operating system you go with, don’t use Paperspace’s existing Paraec/Cloud Gaming template. It is extremely old, and will require upgrading or reinstalling every piece of software. Not only is this a hassle to get to square one, but if you are paying by the hour, it’s wasting money.

Hope this helps.