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The writing’s on the wall for Google Stadia

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Read between the lines

Photo by Amelia Holowaty Krales / The Verge

After fourteen months, Google has decided it doesn’t want to be a game company anymore. Where once it had its own cloud-based console, controller, and the promise of homegrown triple-A games, it no longer wants to build its own games as of today.

And though a Google spokesperson emphasizes that the company continues to “remain committed to Stadia as a platform,” it’s looking increasingly likely that platform won’t be a service where you sign up with Google to buy and rent cloud games.

Stadia boss Phil Harrison announced that Google was shutting down the company’s game studios in a memo today, and I think the exact wording of that memo is extremely telling. Go read it for yourself. I’ll wait.

Back? Good. Did you see the part about how Stadia is now a platform for Google’s partners? It’s pretty hard to miss: Harrison brings it up no fewer than five times in four paragraphs. In all but the very last paragraph, “partners” — not gamers — come first.

This suggests Google has realized an important truth: Stadia, like so many of Google’s other businesses, is optimally one where you aren’t the customer. The paying customers, if Google can get them, are game publishers themselves, and possibly ISPs that would like to deliver a cable-like bundle of games to go along with their cable-like bundles of shows.

Today, Harrison defines Stadia as a “technology platform for industry partners” — which suggests to me that he’s talking about turning Stadia into a white-label cloud gaming service.

If you’ve been following the cloud gaming space, you know white-labeling isn’t a new idea — this is how cloud gaming platforms worked from the start. The pitch for OG game streaming service Gaikai, years before Sony squashed it into the form of PlayStation Now, was to sell companies like Electronic Arts on hosting racks of dedicated servers that would beam free, instantly accessible demos of their games from the cloud.

(Phil Harrison knows this; he sat on Gaikai’s advisory board. Jack Buser, Stadia’s head of business development, ran Sony’s PlayStation Now.)

Nvidia wound up selling so-called “GeForce Grid” servers to do the same thing, some of which wound up being white-labeled by companies like Ubitus to stream Assassin’s Creed games to the Nintendo Switch and Final Fantasy games to iPhones and Chromecasts, among other screens. Several cellular carriers in Asia currently offer white-labeled versions of GeForce Now as well.

There’s nothing inherently wrong with white-labeling. Done properly, it might even unlock one of the most magical things about cloud gaming: the ability to instantly try a game no matter where you are. While companies like Google already claim games are “instantly available,” what they really mean is “after you sign up, log in, and sometimes buy a game.” That’s partly due to the complex web of licensing agreements that game publishers make cloud services sign. But if game publishers were in charge of their own games, they might feel differently. They could give you Gaikai-esque instant access game demos again, ones where you could tap a YouTube advertisement for a game and actually start playing it, no friction whatsoever.

But moving to a white-labeling model would likely mean the end of one of Stadia’s biggest advantages compared to other cloud streaming platforms. Stadia promised you’d eventually be able to use the full horsepower of multiple cloud servers to offer gameplay and graphics that were never possible with a single game system in your home. But it seems incredibly unlikely that an Activision Blizzard or Electronic Arts would build a game that requires multiple Stadia servers for a white-labeled service — the risks of lock-in there would simply be too high.

I’ve interviewed a bunch of cloud gaming leaders, but Google was the first to do more than hint at this kind of multi-server platform — it actually promised to build those games, poaching former leads behind the Assassin’s Creed and God of War franchises to make it happen. Google had an incentive to do it too, since it needed killer apps to sell you on a Stadia subscription, but other publishers already have a huge install base of partner consoles waiting for whatever games they build.

Exclusive, cloud-first games were one of the things that set Google apart from Amazon Luna, Nvidia’s GeForce Now, Sony’s PlayStation Now and the rest. Now, not so much. Google still has some of the best streaming quality and impressive latency to entice partners, but it requires them to port games to Linux right now.

Today’s message, if I’m reading it right, is an olive branch to the game publishers who weren’t properly committed to Stadia before. “Come partner with us; we don’t plan to compete with you anymore.” At the same time, it’s diplomatically worded not to piss off existing Stadia players. Prospective partners don’t want to hitch themselves to a public failure — which is what Stadia might look like if Google shut down the game service now.

But ask yourself: given Google’s track record of axing niche projects, and the current level of interest in Stadia (versus, say, next-gen consoles), how much longer do you think Google will continue to offer and promote a consumer-facing cloud gaming service?

Google has never released Stadia sales or subscriber numbers, so we can’t say for sure how many people have ever seriously tried it, but I’m wondering if today’s announcement tells us everything we need to know. Google just launched Cyberpunk 2077 — the hottest game of the year — on Stadia, and we called Cyberpunk 2077 a make-or-break moment for the service. Cyberpunk had everything going for it on Stadia, including solid performance at a time when next-gen consoles and GPUs have been impossible to find and last-gen consoles struggled to play the game at all, plus a complimentary hardware kit if you purchased the game. Did Google look at Cyberpunk’s sales, grimace, and wonder if a future Google-produced game could do any better?

Harrison’s blog post is titled, in part, “focusing on Stadia’s future as a platform.” That’s exactly what Google appears to be doing. Consumers trying to decide where they should purchase their next game might want to “focus on Stadia’s future as a platform,” too.