Stadia - Google's vision for the future of gaming

Yes, clearly Google put some money into the project, they developed the tech and tried to build entire dev studio. They didn’t invest in marketing, and they priced like it needed to make money day one. To get in you had to spend $130 up-front, a $10/month subscription, and then games were full retail price just to stream.

Compare that to MS Game Pass. It normally costs $15 and I’m convinced they lose money at full price. But you can get it for as little as $151 for three years, $4.19/month. This isn’t a secret, it’s worked for a year now, Microsoft knows about it and they don’t give a shit. This gives access to hundreds of games on Xbox, Windows, and you can stream them too. For $4.19/month. That’s what it takes to get people to sign up, you offer a deal so obviously amazing that you lose money hand over fist for years.

That’s why “priced like it needs to make money day 1” is so damning.

My theory is some Google executive came up with the idea, got Sundar to green-light it, and then fucked off to work at an investment bank in Dubai or something. The next suit in line picked it up and saw a great opportunity to save easily a billion dollars by letting it rot on the vine.

Google’s famously long and involved hiring process can take six to nine months. And it took time for Google to broaden its hiring standards to accommodate skill sets necessary for game development rather than its traditional fields.

This seems dumb, like really dumb. I guess I shouldn’t be surprised with how large companies snail their way to adjusting to a big change but still…

Honestly I think I biggest mistake Google did here was to start a 1p dev studio in the first place. Assuming they were treated the same as a regular Google engineer, they would be being paid 2-3x market rates as a standard game dev. Probably cheaper to just buy a game studio instead.

Not only cheaper, but much more likely to succeed too. But that was the least of their failings.

Bottom line is nobody wants this. People want to buy a PlayStation 5, a Switch, or an Xbox to play these types of games. It’s a product for no one except people who like to say “That tech is neat.”

I disagree. Lowering cost of entry is immensely attractive. Why spend hundreds of dollars on a console if you can play the same games at the same quality for the same price on your smart TV?

Of course if you don’t hit those three targets, you’re sunk.

But hey, in the good news area, Terraria is coming to Stadia after all.

As you may have noticed, we had a ton of issues to kick off the year stemming from the locking-down of Redigit’s entire Google account in early January. After a month of pushing (and with the immense support of our fans), Google finally reached out and was able to provide a lot of transparency around the situation and to restore access to all of our accounts. Due to the hard work the Stadia team has put in - as well as our partners at 505 Games - we have decided that we will allow the upcoming launch Terraria on Google Stadia to proceed. The Terraria Stadia build is based on the DR Studios (latest) build, and is currently at Google for certification review.

Well they didn’t want what Stadia was offering. But if they had launched with real exclusive titles that demonstrated the value of cloud gaming, then followed up with a library of great games, the outcome may have been different.

This seems like whatever makes the secret sauce of game development, it’s isn’t business professionalism or consistency.

Like the anecdote about engineers not understanding why things sell or not, they made a platform, not a product.

tl;DR - Google didn’t understand their customers and made bad choices with Stadia.

Braindump time.

When Blizzard was getting ready to launch World of Warcraft the high water mark was 1 million subscribers. With EverQuest in the low hundreds of thousands - I forget the exact number - a million seemed astronomical. And really the limiting factor was the backend infrastructure - or more accurately the price tag. There was a real possibility Blizzard would effectively go broke if WoW failed. Blizzard’s parent company at the time was having cashflow issues and we ended up leasing the first two datacenters to afford the hardware. We limited the number of copies by only printing so many boxes, estimating 20% concurrency based on Diablo II and other games. That is to say, for every 5 copies sold only 1 would be in use at any given time - like a gym membership. We also expected some number of boxes to sit on people’s shelves unopened as collector’s items.

The game launched with 35% concurrency and creeping even higher on weekends. All those “collector’s copies” were sold on eBay for $1,000 and up. We found that the limiting factor was the character databases. Fortunately we had dark database servers and storage in place - enough that we were able to add 80% more capacity within a week or two.

Ultimately WoW was a hot item for quite a while. We spend years deploying more and more datacenters to keep up with demand. The game eventually peaked at about 12 million subscribers, but no one knew where the end was going to be until it happened.

That’s an example of how wrong a company could be about the market for their game in the positive direction. But Blizzard looked at the prior attempts to do this kind of game and gave it an educated guess. We were off by a lot.

In contrast every MMO that came out for several years after WoW launched as a purchase plus subscription model like WoW. Every new MMO was a “WoW-killer”. It became a joke, because none of those games ever came close to WoW. Several fortunes were lost chasing that dragon.

So these are examples on the other extreme. And maybe it took a dozen tries to beat WoW before people wised up because WoW was so hugely successful - it could be done! But when Blizzard launched World of Warcraft it wasn’t at all apparent an MMO could reach one million subscribers.

None of the game streaming services before Stadia were a clear success. OnLive went broke and sold out to Sony. Gaikai never produced much but technology, and also sold out to Sony. Sony built PS Now - originally offering PS3 games in the cloud. Sony shipped PS Now clients for PC, Mac, PS4, PS Vita, and in their 2017 TVs. Eventually they dropped all but the PC and PS4. The price of the service dropped significantly as well. It’s still around, but pivoted to offering PS4 games for download too.

Someone convinced Google that Stadia could be the next big phenomenon. Tying in to Youtube makes a lot of sense! Google has datacenters they rent out to others, so they have inherent economies of scale. Internet in the US is - slowly - getting better thanks to Google Fiber and others. 5G promises low latency mobile Internet. I can see it - if you overlook the fact that a platform entirely based on game streaming is a solution looking for a big problem. The one use case which makes sense to me - lowering the cost of entry for play games - was undermined from the start. But I can see how they got to some big expected numbers.

The problem was Stadia tried to sell a discount game console while charging full price for games, turning off existing gamers who could get the games on familiar platforms - often for less money. So, on one side - the hardcore gamers who are already familiar with these games and have ways to play them. The other - uninitiated masses who are content with mobile games and just don’t care. The Stadia customer Venn diagram was people interested in modern video games but too apathetic to buy a console. Not a huge customer base. All Google’s inherent advantages couldn’t make up for the small target market.

Had more folks at Google involved in the decision making process understood the potential customers better they could have saved a lot of money and goodwill. They didn’t understand though, and made some bad choices as a result.

Hm. So what you wrote is neat, but also totally beside the point I was trying to make.

The projections being wrong isn’t interesting. Of course the projections are wrong, and of course the product is underperforming, we didn’t need a journalist to tell us that. But the article is also making a very specific claim about the level of underperformance in terms of absolute numbers. And that’s the part that doesn’t make sense, since for a gaming platform trying to compete with Playstation/Xbox/Switch/Steam, a misprediction of a few hundred thousand users is nothing.

The options are either:

  1. They projected a large number of users, and missed that target by a small amount in relative terms.
  2. They projected a tiny number of users, and missed that target by a large amount in relative terms.

Option 1 would suggest that Stadia didn’t actually flop. I doubt anyone thinks that is true.

Option 2 would suggest that they spent billions launching a low margin product. hoping to get hundreds of thousands of users. That can’t be true either. If hitting the goals isn’t enough to make a product a success, that is not a product that gets launched. You either scope down the project, or you find a way of justifying a rosier projection.

This is why the reporting seems garbled. It feels like they had to be projecting millions of users after the first year, and only end up with hundreds of thousands.

I think the market would have been there. Not having to buy $400 of hardware up front should be really appealing to a large proportion of the market. People who play a couple of games per year are the vast majority of console owners.

The problem is that this was that instead of actaually going for that segment, they seemed to be targeting the hardcore gamer market that a) had the least to gain from lower hardware costs, b) would be the most demanding in terms of latency/image quality/etc, c) already would have huge game libraries, d) is probably hostile in general to the whole concept of streaming.

And that targeting failure has to be on Phil Harrison. (Or maybe on whoever hired him. If somebody’s entire industry credentials are that they were involved with two disastrous console launches, just why would you hire them to do a third console launch?)

I think what’s more likely is that they projected hundreds of thousands in the first year and then growing to millions based on momentum in the following years. Instead they got low tens-of-thousands of users (like 15-20k), which indicated that the very concept of their product wasn’t working and that there wouldn’t ever be enough momentum to catch up no matter how much they spent.

Right, they figured users would be chomping at the bit to pay $130 to access the service, $10/month after that, and then paying $60 for games exclusively on Stadia. This disconnection from reality resulted in a bloodbath.

Or the executive turnover I described happened, which seems more likely to me because that would be some crazy shit.

The $400/$500 barrier to entry on a game console really isn’t much of a barrier anymore. In fact, many kids are now getting PCs instead to keep up with the Joneses (streamers).

Stadia and streaming has it all wrong. What we here know as gaming was, is, and always will have an entry cost that people are willing to pay. People want the prestige product to be in the club.

Also, even mobile games have a barrier to entry, often much pricier than consoles over time and replaced more often!

Of course many are willing to pay, but it’s frankly laughable to argue reducing the entry cost wouldn’t bring in more people. I mean, that is obviously true.

If it’s so obviously true, it would have happened. It’s not so obvious to anyone but you and your pie in the sky world.

It’s similar to why Series S was a mistake. No one is looking for high end gaming on budget machines, real or virtual.

So you’re seriously arguing entry cost doesn’t matter? That wasn’t me misinterpreting your position? I assumed it was, because, wow.

They only matter when you are way out of line with expectations. 3DO? That mattered. PCs when they were $3000? That mattered. Neo Geo? Yes, price mattered.

Consumers are comfortable with $700 phones and $400-$500 video game consoles. They also know that they will decrease in price over time and those with less means wait until those times to make their purchase.

FOMO is real. When the product is this vapor that exists on some server somewhere, there is nothing to own, and hence nothing to excite or tie you to using it. It’s a solution in search of a problem. The only way it might have gotten some users was if it was 100% free including the games themselves.

Certainly their timing didn’t help. They launched a product that has lots of benefits for those who want to game on the go, and then COVID hit and nobody was going anywhere. Plus families now had lots of extra money they weren’t spending on going out or on vacations and lots of time at home, so you couldn’t even find consoles in stores through most of 2020. So yeah, the cost of entry for consoles was suddenly not such a big deal.

But I’m dubious that much would be have been different even without COVID.