Didn’t you hear? Google Stadia is dead. In news that will probably shock few of you, Google has killed its nascent game streaming service, a short time after virtually all of its internal content creation for the platform was previously destroyed.
Despite Google’s claims to the contrary, it was likely an easy decision for the company to end its rarely used streaming service. With markets as volatile as they are, many larger tech companies are exploring ways to cut costs, freeze hiring, and ultimately save money. Google Stadia was probably the lowest rung before that, and will free up precious silicon for use in some of Google’s healthier server-based businesses, such as YouTube or Google Play.
As much as I enjoy the glee of seeing Google fail (my pettiness about YouTube blocking for Windows Phone will never end), it’s a shame to the engineers and creatives who have made Stadia a great product overall. And it was a really great product. For years it had much better latency and responsiveness compared to Microsoft’s own Xbox Cloud Gaming, although the gap has narrowed in recent years.
However, Stadia was doomed from the start, and I think pretty much anyone paying attention may have known it. Google wasn’t serious enough about acquiring content, and pushing for Linux versions of games essentially alienated itself from most of modern game development. And they didn’t have an internal Windows translation layer like Steam Deck’s Proton to fall back on, although there were some vague rumors that Stadia was working towards something like that. Anyway, it seems to be too late for the service.
With Stadia leaving the stage, the landscape for this gleaming new game industry has changed a bit. The only major players in the space are Xbox Cloud Gaming and NVIDIA GeForce Now, with Amazon Luna lurking in the distance.
A good thing for Xbox Cloud Gaming?
It’s often frustrating that Microsoft doesn’t offer direct numbers on how to use many of its services, but they have hinted that the Xbox Game Pass Ultimate cloud service is doing quite well. Earlier this year, the company pledged to bring games you own to the cloud service beyond the rotating Netflix-esque library it now offers. They also confirmed the intention to build a Stadia-esque streaming console that you can plug directly into your TV, called Xbox “Keystone”. Microsoft also announced its intention to more than double Xbox Cloud Gaming’s server capacity to “meet demand”. If Xbox’s cloud platform wasn’t doing so well, I doubt they’d make this kind of investment.
And indeed, speaking of investments, the massive Activision-Blizzard deal is almost entirely about investing in content. Games like Diablo IV will be really huge on Xbox Cloud Gaming, with latency taking advantage of the isometric game design, and delivering a true Diablo experience on mobile devices plagued by pay-to-win clones (like Blizzard’s own RPG -meets casino Diablo Immortal).
Stadia VP Phil Harrison reportedly blamed Xbox’s acquisition of Bethesda on Google’s ambivalence about building internal content, realizing that acquiring content is actually, you know, board money at a given moment. “Built, and they will come” isn’t enough in gaming, and Google has learned that the hard way.
Still, Stadia had some passionate fans, and because of its shortcomings, cloud gaming has some great uses for those times when you can’t use the TV for whatever reason. Many of those users are already taking their Stadia refund money and may be considering investing in Xbox Game Pass Ultimate, which will get a family subscription in the short term, and mountains of upcoming Xbox exclusive games in the long run. But could Stadia’s death bring some regulatory complexity for Microsoft?
A Bad Thing for Xbox Cloud Gaming?
The President of the United States, Joe Biden, recently tweeted out his intention to boost competition in the US market. There’s no indication that specific companies have been targeted, but the FTC recently intervened to prevent Facebook from acquiring a VR fitness company, in a move that some legal experts considered to be quite rare.
There is a line of thought that this action revolves around the relative burgeoning of VR space. In the early days of social media, Facebook was allowed to get its hands on WhatsApp, Instagram and other platforms, essentially transforming itself into the sole arbiter of social content on the web. Facebook has been accused of spreading fake news and disinformation campaigns by hostile governments, which has led to several legal challenges over the years. Amazon and Google have both been the target of criticism over how they have exploited their dominance in retail and search to stifle competitors.
Microsoft hasn’t been the subject of major regulatory scrutiny since the browser wars of the late 1990s. However, is there any possibility that Stadia’s death could be seen by regulators as diminished competition in a space that Microsoft is now essentially poised to dominate?
For decades we have seen less competition and more concentration in our economy. That’s why I signed an Executive Order committing the government to full enforcement of our antitrust laws. No more tolerance for abusive monopolies.September 26, 2022
The UK competition authority recently said it plans to investigate more closely the Activision-Blizzard deal for Microsoft, which is expected to be worth about $70 billion dollars. Sony’s PlayStation has turned down the deal, saying it will hurt Microsoft’s market position if Microsoft has exclusive control over mega franchises like Call of Duty. Microsoft usually responds by noting how much smaller it is than PlayStation and Tencent both, even after the Activision-Blizzard deal, while highlighting its intention to keep Call of Duty on PlayStation. Still, Sony’s own cloud streaming service is just a footnote in a space increasingly dominated by Xbox and NVIDIA’s GeForce Now.
It’s still early days for the cloud streaming space, but one thing is clear: it was the lack of content that killed Google Stadia. Can his demise be weaponized by Sony, or even NVIDIA? Could they use Stadia as an example of how the exclusivity of Microsoft content can hurt their own streaming services? I definitely think Stadia’s slow death could become a factor in future regulatory discussions.
The future is cloudy
The long-term viability of cloud streaming as an alternative to native mobile or native console gaming remains uncertain. Whether it’s latency issues or ergonomics, basic cost, or competing handheld devices like the Nintendo Switch or Valve Steam Deck, it’s certainly interesting to watch the twists and turns in this very young industry.
Facebook’s aggressive pursuit of its metaverse white whale is already under the regulatory microscope, but Facebook arguably falls under Joe Biden’s very vague “offensive monopoly” reference. I’d say 2022 Microsoft is far from anything that could be described as offensive. Either way, the death of Google Stadia may shine a spotlight on the role content control plays in the health and competitiveness of different platforms.
Microsoft has always said its goal is to bring games like Call of Duty to more platforms, not less. And maybe we’ll see that dedication tested in a world where Xbox Cloud Gaming is the only major player left in this niche but incredibly promising space.
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