At this year’s Game Developer Conference in San Francisco last week, Google finally pulled the curtain back on one of the worst kept secrets in gaming: Google Stadia, its games streaming service. This article does a capable job of explaining what the Stadia is, but in a nutshell: Stadia is a cloud-based games streaming service that allows players to interact with video games instantly, without downloading anything, on their tablets, laptops, televisions, and mobile phones so long as their internet connection is sufficiently fast. Some specific hardware requirements, such as the fact that Stadia will not work on non-Pixel Android phones at launch, have dampened the lofty aspirations of the service, though.
Stadia isn’t the first ambitious cloud-based games streaming service to come to market: OnLive somewhat infamously was sold for less than $5MM after raising more than $50MM in financing and reaching a peak valuation of nearly $2BN. Gaikai fared better with a $380MM sale to Sony in 2012 and now allegedly powers the “Playstation Now” service, and GameFly acquired Playcast in 2015 to deliver what it called a “Netflix for Games” service.
That term is important, as it has become something of a popular call to arms lately as a number of different companies, from Microsoft to Amazon to Apple to Electronic Arts and a subsidiary of Rovio, have announced products that could be deemed a “Netflix of Gaming”. And in fact, Reed Hastings, Netflix’s CEO, may have tipped his hand for such an endeavor from Netflix itself when he stated that the company “compete(s) with (and lose(s) to) Fortnite more than HBO. When YouTube went down globally for a few minutes in October, (Netflix’s) viewing and signups spiked for that time.”
Almost nothing is known about how Stadia will source content, what it will cost to use, what requirements will be placed on developers in order to have their games appear on the platform, etc. Former Ubisoft executive Jade Raymond recently joined Google to head an internal first-party studio to make games for Stadia, but it’s unknown how large that studio will be or how many games it will publish per year. Google will surely expect to lean heavily on third-party developers for content on the Stadia at launch and for the foreseeable future. As Netflix would certify, being the Netflix of something is expensive: the company is expected to spend $15BN on content in 2019.
And indeed, as this article asserts, the Stadia may be more of a YouTube strategy than a games streaming strategy — or, at least, the Stadia may serve the purpose of further aggrandizing YouTube as games streaming goes mainstream. 50BN hours of gameplay footage were watched on YouTube in 2018, and 200MM people watch gameplay footage each day on YouTube: YouTube is an important part of the gaming ecosystem, and Stadia unifies the viewing experience and the first-hand playing experience in a way that could create a powerful virtuous circle between first-person and third-person gaming engagement. Players will be able to drop pins into gameplay footage on YouTube and then immediately open the game at that moment and start playing. Likewise, players will be able to seamlessly switch between devices, retaining their in situ game state.
It is that last capability that could perhaps be the most monumental promise of Stadia: if every game is playable on a mobile device (all computation is done in the cloud, so end-user hardware profile is irrelevant), then every game is a mobile game. And the Stadia effectively distintermediates the app stores: with Stadia, there is no download requirement in playing a game, and the click-to-stream mechanism effectively extends game discovery to the entire surface area of the web. If game distribution escapes the app stores, then the entire mobile advertising ecosystem could become upended, with a critical pain point — the click-to-install conversion dynamic — being circumvented and otherwise poorly-converting ad inventory like mobile web banners, interstitials, and, conveniently for Google, YouTube inventory becoming suddenly very interesting to mobile advertisers.
This could be a very interesting development. The mobile app ecosystem has been trending toward intermediation as the biggest mobile properties start to look more and more like app stores themselves; Stadia could change that by abstracting away the idea of an app store, at least as games are concerned. Of course, a vast amount of territory exists between now and Stadia being a hugely successful platform that has materially, indelibly changed the landscape of the mobile app ecosystem. Stadia is a complex, ambitious undertaking, so of course it could fall; it’s frankly annoying that so many media commentators elect to vocalize that very obvious fact.
But if the Stadia is successful, it will have a massive impact on the way that smartphone users interact with games. That possibility is intriguing.