Google yesterday unveiled its ambush of the $135 billion gaming industry. The Stadia games streaming service, which threatens to do to the gaming industry what Netflix and Amazon Prime did to television, was last night presented during a keynote speech at the San Francisco-hosted Game Developers Conference. Google is confident that the combination of the global reach of its brand, Cloud Computing infrastructure, AI expertise and YouTube shop window can upend the way a whole industry, one of the biggest in the world, does things.
The gaming market has been growing fast over the last decade but the main driver has been the rise of mobile gaming. Last year the mobile segment overtook PC and console-based gaming’s market share for the first time. However, mobile gaming has increased the overall size of the market rather than take revenue away from the core console and PC segment.
Mobile games have become far more sophisticated with the rise of smartphones. However, they are nowhere near the level of those developed for the far superior computing power of specialist hardware. Mobile gaming is often referred to as ‘casual gaming’ with ‘serious gamers’ loyal to the titles released for consoles and PCs.
Google’s Stadia poses a significant threat to both sectors. All of the computing power required to run the most heavy duty of modern games will be provided by Google’s Cloud datacentres, rather than by device-local hardware. It means that, essentially, only a screen, Chrome browser window and high speed internet connection will be needed to play the kind of games that currently only run on highly specialised, expensive, devices.
Players will also be able to save a game they are playing at home on their television and pick up where they left off via their tablet or smartphone half an hour later. If a fast internet connection is available on the mobile device, the only difference will be the size of the screen. The cheapest of laptops will be able to run the most demanding of games no differently to today’s specialist gaming laptops which can cost thousands of pounds.
A definitive launch date was not provided yesterday but it will be at some point during the second half of 2019 with further details to come in the summer. The service will be initially available in the US, Canada, UK, and Europe.
YouTube, the video content hosting service acquired by Google for $1.65 billion in 2006 will form a key component of the new service. It’s already a popular platform for gamers to upload footage of their gaming. Stradia control pads will allow gamers to directly publish their gaming to YouTube and viewers will be able to start playing the game in question in just the click of a button, straight from the clip. This is a direct challenge to gamer streaming platform Twitch, which has become hugely popular over the past few years and is preferred to YouTube by the core gamer community. Twitch was acquired by Amazon five years ago.
For now though, several key questions remain unanswered. How many and which games will be available via Stadia is not known, presumably because Google is currently working hard behind the scenes negotiating with games publishers. A Stadia developer toolkit has already been launched though and a presumed ambition will be to have some tasty Stadia-exclusive titles by launch.
The other big question is the business model Stadia will operate on. Google may well try to catalogue games titles in a similar way to what video streaming services do with television and film with one subscription offering access to a wide range of offerings. This would be a huge initial investment but the company has deep pockets. Or users might still have to buy titles they wish to play individually or access them on a pay-as-you-play principle. Some kind of hybrid model incorporating all of those options is also possible.
Despite stealing a march and clearly relying on the sheer power of its Cloud Computing resource to solve problems such as latency that have been the bottleneck to game streaming to date, Google won’t think they will have no competition.
Microsoft, the company behind the Xbox also has its Azure Cloud Computing service which it can leverage in a similar way and will certainly quickly enter the fray. Other tech giants such as Amazon, which is not only a Google competitor in Cloud Computing but has a much bigger international market share, will also certainly not leave the move unchallenged. Google may now have a head start but their move yesterday will launch another battle for territory between the technology giants, both in the USA and in China, where Tencent rules the gaming roost. It could get bloody but ultimately, the winners should be gamers all around the world.
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