Google Stadia: How a failed venture will create the future of gaming.

In 2019, Google Stadia made its first attempt to expand into the arena of competitors like Nintendo, Sony and Microsoft. They failed, but it's not over.

In 2019, Google made its first attempt to expand beyond mobile games, and into the arena of competitors like Nintendo, Sony and Microsoft. Their ace in the hole? A cloud-based console – Google Stadia.

With Google Stadia, users can stream games anywhere, anytime using a smartphone, web browser or through Chromecast. Their tagline “Play the biggest games with the stuff that you already own. Instantly.”, promised to change gaming the same way that Netflix changed movies.

Google Stadia failed, but their promise may still come true.

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So, what happened?

Despite having the technical prowess to build a low-latency, high-resolution game streaming service that actually works, Stadia wasn’t able to attract the anticipated number of gamers.

Google has decided to wind down its in-house game development studio which means, no more exclusive content from the SG&E development team. Although Stadia will continue to have a consumer offering, their focus will now include helping developers and publishers use the platform technology to deliver games directly to their players.

As explained by Phil Harrison, VP at Google and General Manager at Stadia:

“We see an important opportunity to work with partners seeking a gaming solution all built on Stadia’s advanced technical infrastructure and platform tools. We believe this is the best path to building Stadia into a long-term, sustainable business that helps grow the industry.”

Why did it fail?

Through Stadia, Google was able to launch a technology bomb that was perhaps 10 years ahead of its time, without putting enough thought into their target audience.

Rivals like Sony’s PS5 and Microsoft’s Xbox Series X/S sold 4.5 million and 3.5 million consoles respectively in 2020. Stadia’s 1 million + subscribers last year fell short by comparison, with one article from The Verge describing it as “a lonely place”.  

How did it go wrong?

There are a few things that might have affected Stadia’s ability to hit its customer target:

  • The 2019 launch was small and could have been bigger (think Disney+ launch).
  • The service was only available to players who paid for the Founder’s Edition.
  • Anticipated features e.g., joining a game direct from a YouTube live stream, or sharing an URL that would let players jump into a saved game, were late to materialise.
  • Little exclusive content and game features meant you could get a similar experience with competitors.
  • Unless you had a fast connection, there were latency issues – major drawback for the overall experience.
  • Serious gamers are used to their way of playing and the service may have been ahead of its time.

The takeaways.

Cases like these present an excellent learning opportunity for building future ventures and anticipating some of the possible challenges that come with it:

  • Disruptive technologies don’t equate to instant market success.
  • Always consider the chicken and the egg dilemma when starting a new platform: Do you fill it with customers or with suppliers first.
  • Some platforms need scale to be successful.
  • Focus on the long term value of each customer, not the initial acquisition cost & revenue.

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