Google Stadia’s shutdown isn’t the end of cloud gaming

An understandable knee-jerk response to Google shuttering its Stadia game-streaming service is: That must be it for cloud gaming, right? We have proven that nobody wants it. Now go away with your laggy, fuzzy, insubstantial server-side gaming. The market says no.

This is not the first time this has happened. Cloud gaming service OnLive tried to steal a march on a nascent technology in 2010 — disastrously too early, it turned out. The service was closed in 2015 after Sony bought it to, essentially, strip it for parts. Stadia, which was launched by one of the world’s richest companies, boasted cutting-edge engineering, and was located at the physical heart of the internet — ie, in Google’s data centers — lasted half as long. That seems to imply a downward trajectory for a technology that many gamers, with a longstanding attachment to local play on consoles and PCs, are skeptical of.

But this assumption would be a mistake. Cloud gaming still has many hurdles to overcome: technical, logistical, in terms of marketing and public perception. But it also has enormous potential benefits in terms of accessibility and ease of use. The truth is that Stadia’s failure is purely and solely down to Google. It chose the wrong strategy for the wrong moment, and then, despite its limitless resources, simply gave up.

Even though Stadia’s 2019 launch came nine long years after OnLive’s, and in the wake of other, similar services like PlayStation Now and Nvidia’s GeForce Now, back then it was early days for cloud gaming — and it still is now. There are multiple things holding back our readiness for this technology.

First among them is the quality of data networks (both wired and wireless), which varies enormously by geography, and has a far more significant impact on the cloud gaming experience than it does on one-way media streaming like audio and video. Even where I live, in London, a major European capital, 5G mobile and fiber broadband are not universally available. In other markets, the situation is much worse.

Secondly, cloud gaming requires a bigger leap of faith from the gaming audience than many marketers seem to realize. Though there are considerable advantages, such as the elimination of lengthy downloads, it represents a far bigger change for consumers than the shift to streaming in other media. We have had movies and music beamed into our homes via TV and radio for many decades; we are used to separating the content from the delivery system. Non-local gaming has never happened before, and divorcing the game from the hardware that plays it — accepting that the magic is happening somewhere else — is a subtle but powerful mental block. It’s also one with real, tangible disadvantages when it comes to quality, which is a compromise that users have come to accept for TV and movies, but not so much for games — at least, not yet.

So, Google tried to catch the cloud gaming wave while it was still early. This wasn’t necessarily a disastrous choice, and the moment was probably right for a soft launch — Stadia’s technology was already excellent, and Google was ready to change minds. But, oddly, a company known for its cautious, iterative approach went all-in with a major, heavily marketed consumer launch instead.

This was a terrible miscalculation. Consumers, unprepared for the very concept of cloud gaming and unclear on how it complemented the gaming hardware they already owned, simply shrugged and looked the other way. Google then compounded this error with a disastrously misguided business model focused on product: the Stadia controller hardware, and the games themselves, which you had to buy at full price (often and absurdly priced higher than they were on Steam).

Adopting a retail model for an intangible product was never going to work, as customers rightly asked what, exactly, it was they were buying. Nothing, as it turned out; Google has at least had the good grace to refund their now-worthless purchases. Stadia didn’t sell because it was an unappealing deal.

Phil Harrison, with experience at PlayStation and Xbox, should have known you can’t launch a platform without exclusive software
Photo: Justin Sullivan/Getty Images

A softer launch might have allowed Google some time to figure these things out. It might also have allowed it to correct another massive oversight, which was the way it put the platform before the software. Platform boss Phil Harrison, formerly of both PlayStation and Xbox, should have known better. At launch, Harrison talked up the genuinely exciting possibilities of games developed natively for the cloud — things these games could do that no game depending on home computing power could manage — but Google had no software ready to demonstrate this.

In fact, it had only just begun the task of assembling studios to build exclusive games, which would obviously be years away. 20 years ago, Microsoft had known it needed to buy Bungie and halo to stand a chance against established platforms when it launched Xbox, but Google ignored the glaring precedent. Having made this critical misstep, Google proved unwilling to tough it out and wait until its investment bore fruit, and pointlessly closed its internal Stadia development studios a scant two years after it had announced their formation.

To be fair to Google, it did enter this market at a great disadvantage: It had no existing games ecosystem to plug Stadia into (save the hardly analogous Google Play marketplace on Android). This has been the ace in the hole of Stadia’s closest (though by no means only) competitor, Microsoft’s Xbox Cloud Gaming.

Microsoft has had the luxury of being able to slip Cloud Gaming into a suite of products and services that includes Xbox consoles, gaming on Windows, and its Game Pass subscription. It has also had the wisdom to soft launch the service (it remains in beta), and to use it as a way to add value to Game Pass, rather than trying to sell it as its own product. It’s a perfect match; it is surely a no-brainer that cloud gaming should be sold as a subscription service, and conveniently, Microsoft already had one, and a library of games to match.

In this context, cloud gaming is presented as a useful, alternative way to enjoy your games, whether it’s playing a perennial favorite like Forza Horizon on an iPad while the TV is in use or using it to immediately sample a new release before committing to a download. (For Sony, PlayStation Now is now positioned similarly as part of a PlayStation Plus subscription, and represents a vital gateway to a whole generation of hard-to-emulate PS3 games.) It is not a paradigm shift, it’s just an added boon — but it worms its way into our lives. We get used to it; we learn what it gives us that our consoles can’t, and also how it complements them. We, alongside game developers, figure out when it works, and when it doesn’t. And when the market is ready, and the networks are ready, and the players are ready, Xbox Cloud Gaming (among other services, no doubt) will also be ready, and waiting with open arms. Google won’t — for the pure and simple reason that it blew it.

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