Stadia’s death isn’t the end of cloud gaming

Google's timing and approach were both incorrect, but the technology is here to stay.

The obvious first reaction to Google shutting down its Stadia game-streaming service is: That must be the end of cloud gaming, right? We’ve demonstrated that no one wants it. Go gone, sluggish, blurry, insignificant server-side gaming. No, says the market.

This is not the first time something like this has occurred. In 2010, cloud gaming firm OnLive attempted to seize a technological lead on a new technology – disastrously too early, as it turned out. The service was shut down in 2015 after Sony purchased it with the intention of stripping it for parts. Stadia, which was founded by one of the world’s wealthiest businesses, touted cutting-edge tech, and was physically located at the core of the internet — i.e., in Google’s data centers – lasted half as long. That appears to signal a downward trend for a technology that many gamers are dubious about, owing to their long-standing loyalty to local play on consoles and PCs.

However, this assumption would be incorrect. Cloud gaming still faces several challenges, including technological, logistical, marketing, and public image issues. However, it offers great potential benefits in terms of accessibility and usability. The fact is that Stadia’s failure is entirely due to Google. It adopted the incorrect plan for the wrong time and then just gave up, despite having unlimited resources.

Despite the fact that Stadia’s 2019 debut occurred nine long years after OnLive’s, and in the wake of other, comparable services like PlayStation Now and Nvidia’s GeForce Now, cloud gaming was still in its infancy back then — as it still is now. There are several factors impeding our preparation for this technology.

The first is the quality of data networks (both wired and wireless), which varies greatly by region and has a significantly greater influence on cloud gaming than it does on one-way media streaming like music and video. Even in London, a large European center, where I live, 5G mobile and fiber broadband are not widely accessible. Other markets are in even worse shape.

Second, cloud gaming necessitates a greater leap of faith on the part of the gaming audience than many marketers appear to comprehend. Though there are significant benefits, such as the removal of long downloads, it represents a significantly more significant change for consumers than the transition to streaming in other media. For many decades, movies and music have been broadcast into our homes via television and radio; we are accustomed to isolating the content from the delivery technology.Non-local gaming has never occurred before, and distancing the game from the hardware that plays it — believing that the magic is taking place someplace else — is a subtle but significant mental barrier. It’s also one with genuine, palpable quality downsides, which is a compromise that customers have grown to accept for TV and movies, but not so much for games – at least not yet.

As a result, Google attempted to ride the cloud gaming wave when it was still in its early stages. This wasn’t strictly a bad decision, and the timing was probably appropriate for a limited launch – Stadia’s technology was already fantastic, and Google was willing to alter its mind. However, despite being recognized for its cautious, iterative strategy, a corporation known for its cautious, iterative approach instead went all-in with a large, widely publicized consumer launch.

This was a poor oversight. Consumers, unprepared for the notion of cloud gaming and unsure how it would complement their existing gaming devices, just shrugged and turned away. Google then exacerbated this blunder with a disastrously misplaced product-focused revenue model: the Stadia controller hardware and the games themselves, which had to be purchased at full price (often and absurdly priced higher than they were on Steam).

Adopting a retail model for an intangible commodity was never going to succeed since buyers were correct to wonder what they were buying. Nothing, as it proved out; Google, at the very least, was gracious enough to refund their now-worthless purchases. Stadia did not sell because the deal seemed unattractive.

A gentler rollout could have given Google more time to iron out these issues. Them may also have allowed it to remedy another major blunder, which was putting the platform ahead of the software. Phil Harrison, the platform’s leader and a former PlayStation and Xbox executive, should have known better. At the time of the launch, Harrison hyped the really exciting potential of cloud-native games — things these games could do that no game relying on home processing power could — but Google had no software available to illustrate this.

In reality, it had just recently began the process of creating studios to create unique games, which would surely take years. When Microsoft introduced Xbox 20 years ago, it knew it needed to purchase Bungie and Halo to compete with existing platforms, but Google ignored the obvious precedent. After making this major error, Google was hesitant to stick it out and wait for its investment to pay off, and it disbanded its internal Stadia development studios prematurely just two years after announcing its existence.

To be fair to Google, it did approach this industry at a significant disadvantage: there was no established gaming ecosystem into which Stadia could be integrated (save the hardly analogous Google Play marketplace on Android). This has been Stadia’s closest (but by no means exclusive) opponent, Microsoft’s Xbox Cloud Gaming.

Microsoft has had the luxury of incorporating Cloud Gaming within a portfolio of products and services that includes Xbox consoles, Windows gaming, and its Game Pass subscription. It also had the foresight to soft launch the service (it is still in beta) and utilize it to add value to Game Pass rather than trying to sell it as a standalone product. It’s a wonderful fit; it’s a no-brainer that cloud gaming should be offered as a subscription service, and Microsoft luckily already had one, as well as a library of games to match.

Cloud gaming is promoted in this context as a handy, alternate method to enjoy your games, whether it’s playing a perennial favorite like Forza Horizon on an iPad while the TV is on or utilizing it to quickly sample a new release before committing to a download. (For Sony, PlayStation Currently is now positioned similarly as part of a PlayStation Plus membership, and serves as an important entrance to a new generation of difficult-to-emulate PS3 titles.) It’s not a paradigm change; it’s simply a bonus — yet it creeps into our lives. We become accustomed to it; we learn what it provides that our consoles do not, as well as how it complements them.Together with game creators, we figure out when it works and when it doesn’t. And, when the market, networks, and gamers are ready, Xbox Cloud Gaming (among other services, no doubt) will be ready and waiting with open arms. Google will not, for the simple reason that it bungled it.