Google’s gaming platform Stadia has had one foot in the grave since it was launched, so any rumors of a closure would be immediately believed.
Now it’s that time again, but this time it’s much more concrete and can hardly be doubted. While the product will certainly not be phased out for end users any time soon, Google’s strategy is now apparent. However, it doesn’t seem promising.
Stadia struggled with problems from the start, but not of a technical nature. Technical problems would probably have been forgiven by the company due to the relatively new technology, and performance problems would have been acknowledged with a shrug in the first few weeks.
But there wasn’t, because the problems were one level higher: Even before the start, Google had to defend itself again and again against prophecies of doom that Stadia would be discontinued quickly. It went so far that even CEO Sundar Pichai had to step in and confirm the long-term plans.
Of course, with such a reputation, it’s hard to convince users of a new platform that will require them to invest a lot of money and perhaps even lure them away from their comfortable home of the Xbox, PlayStation or local gaming PC.
Google has worked hard to earn this reputation over the years and is likely to make it difficult for many promising products to get started – but that can no longer be changed in the short term. And recent acts underscore the reputation once again, but that’s another story.
The mood began to change at the beginning of 2021 at the latest because Google announced the closure of the Games Studios after just a few months and withdrew from game development itself.
Masses of employees who were mainly involved in game development left the company and didn’t take kindly to their former employer. Nevertheless, it went on and over the course of the year, Google was able to make the whole thing a little forgotten. Until now.
A few days ago, a report caused a stir, because it not only talked about the new cloud service “Google Stream”, which is currently completely uninteresting for end-users but above all about the shutdown of the Stadia platform.
In a way, Stream is the infrastructure behind Stadia, which has been the focus of all further development for a long time. Only roughly 20 percent of the time is said to have been invested in Stadia. How this number came about is difficult to assess. But she seems believable.
Strategy changes around Stadia
Stadia has already had at least two smaller strategy changes – and that in less than two and a half years. First, it was said that you only want to operate the platform and deal less with game development. Just a few months later, Stadia Games Studios was founded, which was to unite several developer studios under one roof.
It took just over 13 months for these to close again without a single title on the market. They could never prove themselves and still had to close. The snaking strategy can hardly be made any clearer.
The next strategy change has been in the works for a long time, which was certainly in the drawer right from the start and has now been accelerated: With Google Stream, the expensively built infrastructure is to be offered as a cloud offering for game developers.
They should be able to offer their own Stadia with their own titles without Google appearing. It’s all about making cloud gaming accessible to all developers who don’t have the resources to do it. A good thing that would undoubtedly have come one day anyway.
Google is likely to outsource the operation of Stadia internally to a certain extent. The Stadia team becomes the customer of the cloud team and then only takes on the interim role as an intermediary.
In this way, you could shut down Stadia as much as possible, still continue to operate it and at the same time strengthen the cloud offer. I think that’s the future strategy that everyone can live in the end – including the paying players.
The only question is whether this concept can work in the long term and is really promising for Google and one day also profitable. Because the market is changing and Google suddenly doesn’t seem quite as well-positioned.
The big ones have their own platform
The spectacular planned acquisition of Activision Blizzard by Microsoft and the Bungie takeover of Sony show that consolidation is also beginning on a large scale. Microsoft is a force in the gaming market, has always been, and won’t need Google’s services.
Neither does Sony. Instead, they offer their own platforms and could hold a candle to Google because of their reach (Xbox & PC as well as PlayStation) and bind the important parts to themselves. For Google, the market with small independent studios, which Stadia already has, would remain.
But with these, you will probably not be able to earn as much to operate the infrastructure profitably. Incidentally, Google Cloud has the same problem and has been making billions in losses for years.
So what could Google’s future strategy look like? I really only see two options: Either you kneel in, invest a lot of money and also take over large studios, or you don’t do it.
The first would not go with Google in my opinion. A few weeks ago, I compiled a list of takeover candidates for Google’s Stadia team, but recent developments have made that obsolete.
The next two years will certainly be very interesting. Google Stream should be announced at Google I/O in May at the latest, as well as Stadia’s future plans. It has to prove itself in 2023 and then we’ll see.
It becomes problematic when Stadia is based on Stream and Stream does not develop into the success that Google is hoping for. But let’s not paint the devil on the wall.
Stadia and the upcoming Google Stream will certainly exist for many years to come, but from today’s perspective, Google seems to be in a rather lost position. After all, with Google Play Games you have a plan B in your pocket that looks completely different but secures important access to the large games market.