And so…Stadia is no more.
I followed it since its launch, engaged with many people there and even had a subscription to it. I always believed however that it was very unlikely to succeed, and so it has proved. Sharing a few thoughts here about why I think this happened…
Firstly, I want to be clear I feel very sorry today for those that put so much effort into the project. There were a lot of very good, smart people working on it, and I definitely don’t think we can fault the quality of the people working at the sharp end.
Rather, the demise of Stadia underlines 3 things that I believe to be long-term fundamental truths in this industry:
- Understanding the tech business does not mean you understand the gaming business…they are very different! A lack of understanding on this point leads to big problems. This is evident to me in everything from the tech start-ups pitching game/metaverse “projects”, right up to the failures of Google, Amazon, Apple and various other corporates to genuinely extend their success into the gaming sphere. Technology plays a part in the advancement of the gaming business, but ultimately game development is a creative enterprise, that comes from a fundamentally different place…it is about fun. The tech giants still seem to struggle with this concept. Despite all the smart gaming people brought on board, Stadia really was only the latest manifestation of this ongoing phenomenon of tech folks just not “getting it” when it comes to games.
- “It might be cool…but is it better?” : This is the question companies need to answer when pushing a new technology that changes the way people consume their games, Consumer tech is driven primarily by neophytes and early adopters, who always want to try “the new” and who will spend the big bucks instantly upgrading to the next version of the iPhone each year. What seems to be misunderstood is how – in contrast – gamers are deeply attached to their current ways of doing things. They like their favourite games as they are, and have an inherent suspicion of major changes to them. Against this background, the standard of proof for a new tech is high… “new & cool” is not enough…it needs to be better! Unfortunately, cloud gaming just doesn’t meet this standard right now. Being able to stream your games onto a device is simply not enough to take people away from their consoles and gaming PCs. It is definitely a nice extra feature to add to an existing service (see Xbox Game Pass), but it is not going to replace the current hardware-centred model anytime soon.
- Building a successful gaming platform is a very expensive long-term project that requires investment in technology and content. Network effects and consumer inertia mean the challenges of building a successful gaming platform are many. The upfront investment in developing the technology, then building up an installed base significant enough to attract developers, is eye-wateringly high even for someone like Google. Very few companies have managed to do so successfully. Sony, Nintendo & Microsoft took decades to do it, often making significant missteps along the way (Meta might yet get there with the Quest platform but the jury is still out on that…). Crucially, what the successful companies realised was that to drive initial interest for consumers and subsequently 3rd-party developers, the key is to have amazing exclusive games that make your platform a “must have” for gamers, regardless of their current platform of choice. Without that, no amount of technological gimmicks are going to move them over. Stadia needed its own Zelda, its Gran Turismo, its Halo. Never easy to do even with experienced teams, but when Stadia closed its 1st-party studios last year it lost any last chance of becoming a success as a product, and it really was just a countdown to the end after that.
Like many technologies that ultimately fail as a product, there will be learnings taken from Stadia that might lead to success in different forms at a later date. For now, however, it has shown that the rules of this business still apply.
I applaud anyone that is taking steps in this space as there is always room for innovation, but if you are thinking about it, I strongly recommend you take these fundamental truths into account, get the right external advice, and avoid making the same mistakes as Google did…
Chris Bain