Why the Google Stadia project is a direct threat to the console market?
On June 6th, Google finally revealed pricing details and the mechanics of its Stadia cloud gaming project. The company made it clear that its project wants to win the console market and not help people run games on outdated PCs.
If on startup, when the project still wore a test name for Project Stream, Google has positioned it as a cloud platform (available only for desktops and laptops) that brings together developers, players, and streamers, but now it’s clear: the corporation does not have a goal to become a leader in the cloud games market . The new Stadia goal is the market share of gaming consoles, and not at all a champion in the emerging market of cloud gaming services.
For those who dreamed of a powerful gaming PC in the cloud, such a turn has generated the effect of deceived expectations. Now the battlefield of Google is the TV in the living room, not the gaming computers, as it was before. It looks like Google is calling the console. In favor of this point of view, several facts are immediately spoken.
The critical message of existing cloud services is the refusal of a regular and expensive computer upgrade.
Users are attracted by playing AAA-games with the latest graphics on virtually any, including weak and obsolete devices. But the Stadia presentation showed that Google has very different accents.
The company immediately introduced a “pioneer set” for $ 129 with two “glands” in the kit: the brand controller and media player Chromecast Ultra, which should provide “best gaming experience.”
This is especially interesting in the context of how the Stadia presentations have changed. At GDC 2019 in March, when it was first called Stadia, the focus was on the convenience and accessibility of the game through the cloud. Representatives of the company talked and showed how convenient on any device with the browser Chrome to launch the game literally in one click without thinking about system requirements. But on June 6, at Stadia Connect, all the attention was switched to the convenience of the game through Chromecast on a TV and with a brand controller. Instead of playing anything at a click – buying and connecting additional devices.
Exclusive games and limited choice
The openness of the ecosystem has always been the Android trump card. Yes, it created risks, but at the same time gave the advanced audience more opportunities to customize the system and run any games and applications. In the case of Stadia, the focus is dramatically changing: Google immediately says that the line of games will be limited, the focus is on new AAA projects, and the ecosystem’s openness can be forgotten.
When users of the Playkey gaming platform provided the freedom to choose and enabled, along with the games selected for the service, to launch any games from the Steam directory, the interest was blasting. It was Steam, and not some particular set, that became the most popular choice of users in the service. Gamers on PC appreciate the openness of the platform. The decision in favor of a closed ecosystem and a limited set of games at once indicates that Google has a different priority. For consoles, a limited number of titles and a rigorous selection of projects for the storefront of the marketplace is a common occurrence.
Still closer to the console market, Stadia makes exclusive. Google transparently hints that the platform will have games that, at least temporarily, can not be found elsewhere. Yes, it was on Stadia Connect that for the first time frames were shown from Baldur’s Gate III – a continuation of the cult role series, the previous numbered part of which was released in 2001.
Interestingly, many game developers are not too happy with the latest Stadia presentation and a closed ecosystem solution. Your own platform is always a big issue for developers, who now have to adapt the game to another platform.
Loss-free subscription for quick expansion
What is the cost of cloud games and the potential marginality (or loss) of Google Stadia? In the course of necessary calculations of the cost of server leasing, utilization of game time and other factors, it becomes clear that for $ 15 per month, the service can only work “to zero.”
At the latest presentation at Google, they announced that Stadia will be available for $ 9.99 a month. This price tag is clearly unprofitable. From a company that understands the cost of cloud gaming, this price looks like an aggressive marketing proposal.
It seems that Stadia does not have the task of building unit economies, but it is likely to have the “strangle” of other players. Given that Google has no competitors of the same size in the cloud gaming environment, they are conquering not the conditional Geforce Now, but console rivals. The low cost of streaming is a challenge to Sony, Microsoft, and Nintendo, and not to cloud gaming services at all.
Interestingly, Sony and Microsoft have accepted the Google call. Precisely a few weeks before the Stadia presentation, they announced the creation of an alliance for collaborative development in the cloud gaming industry. The two main rivals in the video game market – and suddenly create an agreement.
Sathya Nadella made it clear in her commentary on the deal that the association will primarily help Azure’s seamless work and Sony streaming technologies: “Our partnership will give players all the strengths of the Azure, Azure AI, and Sony technologies.” Obviously, on the wave of such boom of cloud games in the West, Russian IT giants in the face of Mail.ru and Yandex will not be able to stay away, although they still prefer to keep silent.
Running Stadia at the end of the life cycle of the current console
Despite the protracted platform test (for the first time about Project Stream, as previously called the service, it was announced in October 2018), the official launch of Stadia is scheduled for November 2019. This is a high season of the video game market, but, moreover, the sunset of the current generation of consoles.
Google understands that the audience is already bored with the capacities of the current generation of consoles. Microsoft and Sony are preparing to launch the new Xbox and PlayStation. And at this point, Google offers buyers an alternative – another, more affordable iron.
The new “classic” console at the startup costs $ 400-500, while the Chromecast with the controller costs $ 129-300 (depending on the stock) plus the subscription cost. It is no coincidence that on the official presentation, Stadia’s performance is compared not with similar gaming PCs, but with consoles.
Consoles are more interesting for the Google market.
Of course, one can only guess why Google decided to develop Stadia as a “cloud console,” not a cloud alternative to a powerful gaming PC.
But there is one obvious hypothesis: Google understands that there is no significant market for cloud games today. Consoles are a completely different story.
This is a vast, long-established market, where today there is something to fight for. Perhaps the struggle for a piece of delicious cake on the console market is recognized by Google as a less risky strategy than the competition for the still damp cloud of game services.