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Google Enters Gaming, Unveils Google Stadia
Gaming, Google

Google unveiled Google Stadia, its cloud gaming platform, during the company’s Tuesday GDC keynote. Google Stadia enables gamers to play on any of their devices with a chrome browser and even cast them to a TV. For gamers, this means access to great titles without purchasing a gaming console or high-end PC.

It might be surprising to learn that games are the single biggest form of entertainment in the world. Google backed up this claim with impressive data points explaining why we are seeing more Big Tech companies get into gaming. On YouTube alone, 200+ million people are watching YouTube Gaming content every day, totaling 50+ billion hours watched in 2018. Now that Google has thrown its hat in the ring with Stadia, the gaming industry accelerates its trend towards a similar transformation that film and music industries have undergone thanks to tech companies like Spotify and Netflix.

What we’re most excited about for players

  • Quality. Google Stadia games will be rendered at 4K, 60 FPS with HDR and surround sound.
  • Content Creators. Stadia was developed with content creators in mind. On Google’s new Stadia controller, there is a capture button built-in. This allows gamers to immediately share their content to YouTube gaming. Google also shared engagement features like Crowd Play, which will allow YouTube gaming viewers to join live games with content creators.
  • Voice Integration. The second built-in feature to the Stadia controller is a Google Assistant button. This gives gamers the ability to ask Google Assistant questions like “how do I get past this level?” This could bring up a YouTube video to show a gamer what they need to do next, without having them leave the Stadia experience.
  • Full cross-platform play. Google will make full cross-platform play available to everyone on Stadia. Gamers can use their existing hardware (mice, keyboards, controllers) to play anyone, on any device.
  • Frictionless Ecosystem: One of the more underrated features of Stadia is its approach to bringing video games into the social fabric of the internet. Twitch streamers can share a simple link to their audience and have them start playing that game in 5 seconds. No need to wait hours to download a game on your hardware to play. This points to a games subscription platform (Netflix for games) down the line to make the experience even less frictionless. Like music and movies, no more owning content, just streaming whenever and wherever you want it.

What we’re most excited about for developers

  • Distributed Physics. Traditionally, it has been difficult to implement online-multiplayer games with complicated physics. Since computation will be on the cloud, games can have much more accurate simulation on a larger scale than before. This opens the door for more realistic games and experiences that were not possible previously.
  • Optimization. Since Stadia will run on a set of known hardware, developers can optimize their games for improved performance on Stadia.
  • Hardware Scaling. Developers will have more freedom to create performance intensive games because the Cloud makes it is easy to add additional resources. It remains to be seen how pricing will be affected by using more than one Stadia instance to run a game.
  • Increased Security. Since memory is on the Cloud cheating/hacking is more difficult.
  • Multiplayer Experience. With the potential for lower latency games and distributed physics, it could be possible to create online games where hundreds or even thousands of players compete with each other. Maps for these games will likely be much larger than before. Since players won’t have to download games, maps can be much larger with more detailed textures.
  • Split Screen. Co-op modes in games have been on the decline. Part of this is due to the popularity of purely online formats (such as Battle Royale) but part is also due to hardware limitations of rendering two screens at the same time. With Stadia, there is a renewed opportunity for developers to create split screen games which would not be possible on today’s consoles.

What we don’t know

  • Quality. Google did not give us much proof they could deliver on their lofty promises. This is a red flag because if they had an impressive demo beyond the same Assassin’s Creed game they showed in October, they likely would have shown it off to address what they knew would be the #1 concern of the platform.
  • Launch Date. Google Stadia will launch in 2019, but that was as specific as they were willing to get.
  • Cost. Google did not mention the cost of Google Stadia. While it’s likely a monthly subscription to access the platform, it’s unclear how many titles will be included. Game developers and publishers are typically charging $60 for new AAA titles. Convincing them to change that model could take some time.
  • Content. Google didn’t give much information about what content will be available at launch. They announced a new first-party game studio led by Jade Raymond, which will develop content specifically for Stadia. Outside of that announcement, we know both Unity and Unreal will be supported on Stadia and that Google will work with external developers to bring content on to the platform. We learned that existing games cannot just be streamed on Stadia without undergoing a porting process by its developers that could take months per game.
  • User Experience. In theory, Google Stadia will be a great experience for gamers. Gamers will spend less money on hardware, be able to play games in more places, and engage with their favorite content creators in new ways. Until reviews from the first customers are in, we won’t know exactly how good the experience is. Gamers may be limited by their own internet connections at home which could impact latency. There is also the concern that data caps from ISPs may lead to higher costs associated with cloud gaming.

Bottom Line

Google Stadia shows great promise for the future of gaming, but there are a lot of unanswered questions which will determine the winner(s) in the space. As we’ve seen with streaming platforms, content remains king. While Google committed to first-party content, it lags behind Microsoft, who is also launching a cloud gaming platform soon and has a strong portfolio of studios. Wooing publishers to put their content on a cloud gaming platform is important. We’ll be looking for third-party content commitments in the next few months.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

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