3 Reasons Why Google Stadia Failed to Make a Splash in Cloud Gaming

3 Reasons Why Google Stadia Failed
Cheyne Gateley/VIP

Google’s decision earlier this month to close Stadia Games and Entertainment, the in-house studio developing first-party games that would have been exclusive to its Stadia cloud gaming service, represents a massive revision to the company’s focus for Stadia. 

Citing the exponential costs that come with developing high-quality games, closing the studio should enable Google to better focus on fine-tuning Stadia’s tech as it streams more third-party games. 

There are three key factors Google must understand in order to sharpen Stadia’s strategy.

The Promise of First-Party Games Doesn’t Automatically Add Value 

Despite the intent for Stadia to rival consoles with its own exclusive games, none of the games had released prior to the studio shutting down. 

Making unreleased exclusives a selling point for Stadia was a mistake in the first place, and one that could have been avoided had they paid better attention to Xbox.

PlayStation 4 consoles outsold Xbox One by over twice as many units, despite both systems launching together in November 2013, and Nintendo’s 2017 Switch console also outsold Xbox.

Unlike its chief rivals, Xbox lacked first-party titles beyond key franchises like “Halo” and “Gears of War,” so Xbox Game Studios embarked on an acquisition spree over the last four years to match the size of Sony Interactive Entertainment’s studio suite, culminating in the September 2020 purchase of Bethesda Softworks, a prolific publisher.  

The intention was to begin the next console generation with a sufficient pipeline of exclusives, starting with “Halo Infinite” to lead the launch slate for the Xbox Series X and S consoles. 

But “Halo Infinite” was delayedand four weeks later those consoles were selling about half as much as PlayStation 5, which released alongside them in November 2020. 

If Xbox is struggling this hard to make first-party titles expand sales, it was shortsighted of Google to assume unreleased exclusives would lure subscribers to Stadia.

Google’s Streaming-Only Approach Ignored Gamer Preference 

The supposed benefit of cloud gaming is the ability to play numerous games without downloading anything, avoiding overloaded hard drives and lengthy download times. 

Again, Google failed to pay attention to a desired competitor, this time PlayStation. 

Launched in 2014, PlayStation Now is Sony’s cloud gaming effort, though it has consistently struggled to gain subscribers.

But unlike PS Now, the Xbox Game Pass subscription service, launched in 2017, lacked cloud gaming until September 2020, when xCloud launched as a component of its Ultimate tier. The same tier also includes access to EA Play, another download-only service with triple the subs of PS Now. 

The ability for gamers to play offline is important, given finicky ISPs whose dips in speed affect performance, which ultimately led Sony to enable downloads for certain PS Now titles in 2018. 

Unsurprisingly, Stadia’s launch was mired by performance issues that garnered negative perception of the brand. 

As Google worked to fix Stadia’s performance issues, Nvidia publicly released its own cloud gaming entrant dedicated to high-end performance, GeForce Now, in February 2020. 

Targeted at PC gamers, GeForce Now connects users to its own server with graphics capabilities optimized for top performance and fidelity while enabling users to play games from their own library remotely. Nvidia has since claimed millions of subscribers.

Stadia may have improved its tech enough, to the point where its port of the woefully broken “Cyberpunk 2077” is said to operate well on the service. But ultimately Google’s cloud-only approach was undermined by services with a better understanding of player convenience. 

Stadia’s Bundles Weren’t Offering Enough 

Stadia has a Pro tier in which subscribers pay to access a rotating selection of titles at no additional cost, while its free tier still requires users to purchase the games they want to play. Likewise, Pro users still have to pay for anything that isn’t a free monthly game.

There are about 100 games available to purchase on Stadia, and February’s selection of Pro games amounts to under 20. Compare this with Xbox Game Pass, where Ultimate subscribers can stream 150 titles on xCloud alone, alongside additional access to the EA Play’s library and a free month of Disney+.

It’s not surprising that Xbox Game Pass nearly doubled its subscribers in less than a year, given how much it offers gamers, so Google’s decision to sacrifice its exclusives in order to utilize more resources toward business partnerships is the only way to keep Stadia afloat. 

But Amazon is here as well, as invitational early access for its Luna cloud gaming service launched in October 2020, and appears to be taking a channel-oriented approach similar to Prime Video, with access to the Ubisoft+ subscription service as its only add-on for now. 

Stadia has struck the same deal and will now face the challenge of expanding third-party partnerships and building its tech alongside a rival with deeper pockets and the leading cloud provider.

Expectations for cloud gaming are still high, with a new report from Grand View Research estimating the market will be worth more than $7 billion by 2027.  

If Google wants to achieve and maintain prominence in cloud gaming, it best keep its head grounded from here on out.