Why Did Google Stadia Die? Experts Point To Lack Of Content, Technology Incompatibilities

Until recently, Google seemed all-in on gaming.

Stadia, Google’s cloud gaming service, was announced in November 2019, amid an industry rush to cloud gaming.

With the service, users could stream games via Chromecast, the Chrome browser, and mobile apps while controlling gameplay with a Wi-Fi peripheral. It was billed as a competitor to similar services offered by gaming giants, including Xbox Cloud Gaming, Sony PlayStation Cloud, and Nvidia GeForce Now.

To develop content for the nascent platform, the company hired industry legends, including Phil Harrison, Jade Raymond, and Shannon Studstill, to lead the effort. Even Google CEO Sundar Pichai said that the company was “indebted to games” during 2019’s Game Developers Conference in San Francisco.

Some industry analysts were surprised when the company announced it would be shutting down Stadia less than four years after it had been launched. Google promised to refund all Stadia purchases, both hardware and software, and even pushed out a software update that converted Stadia controllers into standard Bluetooth devices.

New insights, plus expert commentary, suggest why Google may have folded the project: lack of content and less-than-ideal technology infrastructure. In fact, some regulators are using Stadia’s closure as key evidence that may stop Microsoft’s acquisition of Activision Blizzard in the UK.

“Google’s recent decision to shut down its own cloud gaming service, Stadia, shows that merely having some strengths relevant to cloud gaming is not enough to guarantee a platform’s success,” wrote the UK’s Competition and Markets Authority (CMA), in a report.

According to provisional findings from the CMA, Google Stadia had less than 5{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} cloud gaming market share in 2022. It was actually down from Google’s estimate of 5-10{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} market share in 2021.

By the end of 2020, there were roughly 750,000 monthly active Stadia users, according to Insider, with a person close to the service claiming retention was a concern. Google has never officially revealed Stadia subscriber counts.

By comparison, Microsoft’s cloud gaming software, Xbox Cloud Gaming, had a 60-70{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} share of the cloud gaming market in 2022. Both Sony PlayStation Cloud and Nvidia GeForce Now reported a 10-20{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} market share in 2022, while Amazon Luna also reported 0-5{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896}.

The CMA received that information from Google, as a part of its investigation into Microsoft’s acquisition of Activision Blizzard. According to the report, if the government approves the acquisition, there will be less competition in the UK for gaming consoles and cloud gaming services.

In particular, the CMA attributed Google Stadia’s shutdown to a lack of content and largely incompatible technology infrastructure.

“We consider Microsoft already has a strong position on first-party content compared to most competitors. We provisionally believe that content is particularly important to the success of a cloud gaming service, particularly considering Google’s failure with Stadia, which our evidence suggests was caused at least in part by a lack of gaming content, which was connected to its use of a Linux OS,” the CMA wrote.

Gaming industry veteran Mark Long, who has led projects at Microsoft, HBO, and is currently the CEO of NEON, agrees that content is king.

“You do not get in your car and drive to the store to buy an Xbox. You go out to buy Halo, to buy the experience of Halo. It’s not about the technology, it’s about the games,” he said.

While Google attempted to make up for its content deficiencies by creating its own independent studio, Long suggested it could have taken the company up to five years to establish a successful franchise.

“Culturally, they were kind of apologetic about what they didn’t know about the industry. But after I got into the beta access and played with it, I thought was a f**king amazing product,” he said.

“I remember taking my laptop to Starbucks to test it out, just to see how good it was. As long as you had less than 50 milliseconds of latency, you could still play a first-person shooter, which was crazy.”

Long, who helped launch Microsoft’s cloud gaming service, outlined some of the challenges associated with cloud gaming. Each gamer needs their own dedicated server, which often requires a high-end server with expensive graphics cards. Stadia games ran on Linux OS infrastructure, which made porting games to the platform difficult.

He said some of the failures could be attributed to Google’s Stadia business model, which required gamers to purchase titles outright. Other cloud gaming platforms allow members to play hundreds of games by paying for one, monthly membership fee.

“They were going to lose a lot of money and they just weren’t committed,” he said. “Whereas Epic Games, I think they lose $70 million a year on the game store. They’re still giving away content to amass players to get them to buy their exclusive content.”

“If Stadia had Grand Theft Auto and nobody else had Grand Theft Auto, Stadia would be the biggest thing in the world right now.”