October 5, 2022 | Mike Fischer | Senior Advisor
It’s hard to feel bad when one of its ideas ends up in the Google Graveyard.
Stadia, Google’s cloud-gaming service, will be shuttered in January 2023. The gaming audience, hardly known for its empathy, seems to dancing on Stadia’s grave. But as the confetti settles, what lessons can be gleaned from Stadia’s demise?
Lesson 1: Cloud Gaming Works
Stadia did not deliver perfect service quality all the time for everyone, but it did prove that cloud gaming is a technically viable platform. Performance and economic efficiencies are already quite good, and sServices such as NVIDIA’s GeForce NOW and Microsoft’s XCloud services will keep the momentum moving forward. But the path forward is defined by evolution (incremental improvements over time) versus revolution.
Lesson 2: Content is Still King
Stadia didn’t fail because of its cloud platform. It failed because it didn’t offer enough of the games that people wanted to play. Building a game platform is hard. Content providers won’t support a platform without tens of millions of users, but users won’t join a platform that doesn’t have a lot of great games. Breaking out of this Catch-22 requires a huge budget to buy out content rights and provide incentives (free games) for users to play.
Google did have some big content deals, such as Cyberpunk 2077 (which performed better on Stadia than the PlayStation or Xbox version) but in general Stadia’s content offering was weak. It did not offer a comprehensive library of games nor (most important of all) exclusive games that would attract users to its platform. Stadia was late to launch its one and only in-house studio, and soon shut that studio down, leaving it at the mercy of third-party publishers and independent developers.
Google’s attitude toward content acquisition was “build it and they will come.” It neither sufficiently courted game publishers nor spent enough on content deals, and Stadia’s design had technical barriers that made it more difficult to integrate content from other platforms. As a result, most content providers adopted a wait-and-see attitude toward Stadia.
Lesson 3: Marketing Matters
Marketing is the Rodney Dangerfield of the video game industry—it gets no respect. Stadia is a good example of what can happen when marketing is neglected, or the strategy is wrong. It was never able to articulate a meaningful value proposition that attracted users. Gamers were never given a compelling reason to switch to, or even try, Stadia. Its launch campaign featured glitzy, expensive video ads that never delivered the simple, compelling message needed: you can now play console games without buying a console. Instead, Google promoted obscure technical features (multi-device gaming) and made false promises (“Stadia has the games you want to play”).
A more compelling message backed by a better free trial offer would have created a call to action sufficient to kick-start interest in the Stadia platform. After all, as a cloud platform that requires no hardware purchase, the switching cost is zero.
I predict that better cloud gaming services will rise from the ashes of Stadia. Amazon’s Luna cloud-gaming service is making many of the same mistakes as Stadia, but Microsoft’s xCloud and NVIDIA’s GEForce NOW continue their slow-but-steady growth and improvement. Newer platforms, such as Oorbit and Genvid, go beyond current solutions by leveraging cloud technology to deliver all-new types of interactive content.
The dominance of cloud gaming platforms is just a matter of time.