Rendered image data is encoded by a server computing device and transmitted to a remote client device that executes an interactive application program. The client device decodes and displays the image data and, when the user interacts with the application program, the client device provides input control signals to the server computing device. When input control signals are received by the server, the latency incurred for encoding and/or decoding the image data is reduced. Therefore, the user does not experience inconsistencies in the frame rate of images displayed on the client when the user interacts with the application program. The reduction in latency is achieved by dynamically switching from a hardware implemented encoding technique to a software implemented encoding technique. Latency may also be reduced by dynamically switching from a hardware implemented decoding technique to a software implemented decoding technique.