A few weeks ago, Google launched Stadia, entering the cloud gaming service wars. A cloud gaming service, Stadia allows subscribers to stream and play games to any device so long as it’s connected to the internet. While I’ve not tried Stadia, reviews of Google’s service are not great. The visuals are sub-par, latency is an issue, and the Chromecast device it comes with tends to overheat. Ouch. What went wrong with Google Stadia?
Considering our substantial review centric culture, more on this in another post, I don’t see Stadia having the user base, or growth for Google to justify continued R&D expenditure into the product. Nor do I see gaming as a pillar of their long term growth strategy. I eventually see Stadia added to the company’s product graveyard in a year or two. Hey, remember Google Wave?
So what went wrong with Google Stadia?
Too much, too soon. Google may have thought they were bringing an MVP to market. Instead, they attempted to launch a mature product that would directly compete with the SONY Playstation and MSFT XBOX in time for the holidays. A couple of things to note here.
- They shipped a product that wasn’t ready for primetime, which has many substitutes that do the same thing but better. No unique value proposition for end-users, couple that with high switching costs per platform, and it’s not the start of a successful recipe. My $2 is that management wanted to see an uplift from holiday hardware sales, and they pushed to launch early – a mistake.
- Stadia went head to head with the de facto industry leaders, SONY, and MSFT, instead of focusing on a market and distribution network they already have. What I mean is every Android device.
What they should have done with the product:
Stadia should have been an Android app. It should have streamed more casual and mobile games that aren’t reliant on AAA graphics piped to a 60in TV at 4K. For library development, they should have secured strategic distribution rights to an upcoming desired release from any number of studios, integrated the service with Bluetooth XBOX and Playstation controllers, creating a handful of compelling reasons for users to subscribe.
A subscription service that would let users experience more casual games for an incremental monthly fee would have allowed the company to develop, test, and iterate the technology.
With each generation, Stadia will become better — eventually forming into a truly world-class product. Instead, Google did what every first-time startup founder or corporate innovation lab does; it built out too much too soon, underscored the size of the deliverable, and blew it straight out of the gate.
Ironically, this “should have” is precisely what Apple is doing with its Apple Arcade offering. Apple’s partnered with leading game studios, they’re offering a robust library of family-friendly titles for a monthly sub, and while they may not have AAA titles yet, I’m willing to bet the farm that they’re in Arcade’s product roadmap.
Who’s who and how the market will move?
SONY has a lot to gain with the PS Now service. I think internally; it’s probably worried about market cannibalization of the PlayStation hardware product. But are users of the PS the same as of a streaming service? My guess is no – these people haven’t purchased the hardware for a reason. Maybe they’re not pushing the product due to technological limitations? If anyone’s tried it, I’d love to hear your thoughts on performance.
Microsoft is launching a service called projectXcloud that streams XBOX games to tablets over wifi and has a sub-service but not all over the cloud. It’s moving in a different direction altogether, streaming XBOX games you own to Android devices and requires an XBOX controller. ProjectXcloud seems a bit contrived and in the vein of old guard Microsoft products.
And then there’s Apples unassuming Arcade service that is textbook on how Apple enters markets. The way the company innovates – this is them, getting their feet wet In the gaming space to understand which direction it should move, how to make the service better, and it’s using an established platform – the App Store to do it. Fun fact, the Apple TV4 is a great streaming device capable of 4K output. If the service capitalizes R&D further, I can easily see AAA titles coming to the service for a “premium” or “+” subscription fee and another win for the Cupertino based giant in 3-5 years.
As for Stadia – Google is positioned spectacularly for a similar move to Apple’s, every Android device is a distribution channel, phones, tablets, TVs, but the question is will they pivot? My guess is no.
Similar services have launched over the past decade, none of them have had much success in the cloud gaming service arena, likely due to limitations in technology, and bandwidth, is the cloud gaming service finally coming? Will users no longer require dedicated hardware? Will everything be piped in and rendered server-side? Yah probably, and soon enough. See 3-5 years, maybe 7 depending on the economic climate.