Google has recently announced that the first-party studios of Stadia, a subscription-based cloud gaming service created by Google, are being shut down. This news is puzzling for the tech giant as there has been no indication of the incoming shutdown in any public message. Stadia’s tone has darkened between January and February to the dismay of many observers. This shutdown has put a wrench in the once imminent takeover of the gaming market by big tech companies.
One of the big issues revealed by the Stadia shutdown is the lack of a realistic perspective on entering the gaming market. Google expected to instantly create a hit game, dominate cloud gaming, and achieve maximum growth within the first two years. Expecting to dominate within two years completely ignores the reality that the gaming space already has multiple game subscription services created by companies endemic to the industry. Google also entered the gaming market when Microsoft was busy consolidating more power than ever. For Google to compete, they will have to increase spending to catch-up with their competition.
One executive has already left Google following this news release, and more are sure to follow. Any executive that wants to remain in the gaming industry would be wise to jump ship early. Google has signaled that they are unwilling to commit enough resources to become a force in the gaming industry.
Unfortunately, Google will not be the only big tech company to fail in gaming. Microsoft’s leap into game streaming ended similarly with Mixer staff being promptly laid off and the site being shut down. Amazon made another recent failed attempt into the gaming market with their disastrous game called Crucible which was pulled after a few days of being released. Facebook’s game streaming platform has been one of the only decent attempts to conquer the gaming market, but Zuckerberg still has to defeat the behemoth of “Twitch.tv”.
The big question now is how long Google will continue to support the remaining pieces of Stadia. Keeping the service online is costly, and Google will eventually ask itself why it is spending unnecessary money on gaming. Stadia must rely on third-party studios for future titles; However, third-party studios will not want to spend resources on a service that might disappear in a few months. Google’s good graces can only last so long before corporate accountants decide to pull the plug.