Stadia was barely a factor in the cloud gaming market
Google Turned Off Stadia: Why Did Google Suppose It Was Going Off the Ground? An Empirical Analysis of Stadia and Related Platforms
Google’s plan to halt the service had been rumored since July, when the now-suspended Twitter account Killed By Google speculated that Stadia would be finished by the end of summer. At the time, Stadia’s official Twitter account bit back, claiming that “Stadia is not shutting down.” That is what is happening two months later.
Surely, if the company was willing to admit this, that meant it understood that getting cloud gaming off the ground would be a long-term commitment, right? Spoiler: Raymond would leave Google just over a year later when it shut down Stadia Games & Entertainment
He then continued to say that Google was “unequivocally” in it for the long haul, and that it was looking “many years out into the future.” The entire interview should be read in a few minutes. It’s interesting but a little sad in retrospect.
At its Google for Games Developer Summit, the company announced several new features for Stadia and thanked partners and players for their “ongoing support.” One of the features was “click-to-play trials,” which were basically instant demos. The company said it would be coming to all Stadia titles over the next two decades.
I’ve also used Stadia to play games like Cyberpunk 2077 on laptops and phones that would never be able to power such a title. You just navigate to the website, hit a button, and you are playing a game a few seconds later. The experience is simple and it is clear that this is the most user-friendly experience in the market. Competition like GeForce Now is a bit clunky, and although they are not as user-friendly.
Just a few weeks ago, Google publicly retreated from cloud gaming with the surprise announcement that it would be shutting down Stadia. By throwing in the towel, it seemed like Microsoft, which has made cloud gaming a perk but not its primary focus for Xbox, has the best chance at popular adoption, as it’s probably the closest thing to a “Netflix for video games” that we have so far. Amazon’s Luna doesn’t seem to be a big hit, and most people don’t seem aware of Nvidia’s GeForce Now.
Employees on the Stadia side were just as confused. Heineman got an apology from the employee, who said that they were unable to share the news. “We found out at the same time the blog was released.”
Game subscription services typically offer developers a single lump sum, up front or after launch, as compensation. Stadia also offered developers a 70 percent revenue share from its Pro subscription service, and a 15 percent commission for the first million dollars in digital store sales, a reduction from the previous price point. As one indie creator put it, that gave developers the chance to make a low six figures within their first month. Furthermore, Stadia sales didn’t seem to overlap with other platforms. Stadia’s profits were not concerned with profit, but rather with using it to amplify the benefits of the developer.
One hurdle Netflix will have to overcome is building a strong technical infrastructure for cloud gaming. Streaming games is a “different animal” than streaming movies and TV shows, Joost van Dreunen, an adjunct assistant professor at the NYU Stern School of Business, said in an interview. Netflix’s backend is based largely on Amazon Web Services, which isn’t ideal for streaming gaming, especially for multiplayer games, according to van Dreunen. It’s important for big studios like Roblox and Riot Games to build their own technology so that they are able to provide better experiences and reduce the number of games played.
Amazon Luna launched in March of 2022, and it held between zero and 5% of the cloud gaming market by September of that year. Despite making efforts to get new users to use the service, it is still only available to US customers. If Stadia is anything to go by, Amazon will be hard-pressed to avoid the same fate as Luna.
It appears that the company is committed to getting game development right. It’s acquired gaming developers, established an internal studio in Helsinki, and just announced a California-based studio headed up by former Overwatch executive producer Chacko Sonny. And Verdu seems to be willing to give its studios room to grow. “With internal games, we want to build institutional competence. We want teams to go through multiple cycles together and essentially get really good at working together and delivering great products,” he said. It’s the only way you can give them space inside of an organization.
The study was conducted as a part of the investigation into Microsoft. According to the findings report, the merger may prevent other platforms from offering a competitive game library and may have contributed to Stadia’s demise. “We provisionally believe that content is particularly important to the success of a cloud gaming service,” reads the report. “Particularly considering Google’s failure with Stadia, which our evidence suggests was caused at least in part by a lack of gaming content, which was connected to its use of a Linux OS.”
The regulator says it probably overstated Sony’s market share in the two years that were included, because some people who used its game streaming and were subscribed to both PS3 and PS4 were double-counted. It is difficult to compare the figures as the data was collected at differing times, for example, between January and September when Xbox Cloud Gaming figures were taken.