Google Stadia Impacts on Gaming Value Chain
The potential impacts of Google Stadia across the gaming value chain include players to access the games without any hardware requirement; full cross-platform play to hurt the gaming hardware market; remove friction between gamers and the game; reachability to only internet-accessible users; content producers to reach more players with no hardware requirement platform; and many other impacts as discussed below.
- Google announced its new game-streaming platform called Stadia, an innovative technology that claims to bring gamers, developers, viewers, and streamers closer together with a cloud gaming service.
- In practice, this means that one can click on any link, including the YouTube links, to accessibly join and play any video game. The platform further enables players to play on any device such as laptops, desktop computers, cellphones, tablets, or Internet-connected TVs. The gamers can easily switch between multiple devices with the saved-progress feature.
- This launch will facilitate players to access the games without any hardware requirement, except for an optional Google game Stadia controller that would connect directly to the servers (instead of a particular device physically), that is, over a Wi-Fi.
- Google is planning to launch Stadia in 2019 in the United States, Canada, the United Kingdom, and most parts of Europe.
- The company did not disclose much about the platform’s pricing plan as the discussions are ongoing with the publishers and other partners.
POTENTIAL IMPACTS OF GOOGLE STADIA ACROSS THE GAMING VALUE CHAIN
- Stadia will “embrace full cross-platform play,” although developers’ liberty on what they can offer will remain the same when compared to Sony, Microsoft, and Nintendo platforms.
- Google stated that developers can benefit from innovations such as distributed physics and increase the number of players from hundreds to thousands in the future.
- The translation of games that are essentially developed for consoles or PC to a completely new platform will not be easy for the game developers.
- Game developers will not have to repress their “creative ambitions to fit humbler hardware.” Many content creators believe that digital downloads will bring them closer and remove friction between gamers and the game. It can get people who don’t have the hardware to actually participate in their games with the help of this cloud gaming platform.
- However, the accessibility to a fast internet connection by most of the people in the world is still a concern for the game content creators who are likely to consider this cloud gaming platform. Google Stadia’s ambition of 4K streaming might require an internet speed of 40-50 Mbps, which half of the Americans do not have. On an optimistic note, the other half of Americans do have a decent internet connection which can be enough to succeed, for both the developers and Stadia.
- Google has announced that they have already partnered with 100 developers, including Unreal Engine, Havok, and Unity. Several publishers and third-party game developers offered support for Google Stadia, including id software and Ubisoft.
- Google Stadia system will allow content creators to offer more couch co-op games where developers will not have to worry “about the graphical hit that comes with split-screen co-op.” This is because Google will be managing the computing power where each player will be “a separate, server-powered instance”.
- The pricing plan is not yet disclosed by Google which arose many questions about the revenue-split model, costliness, traditional online retailer pricing versus monthly subscription fee, and many other concerns. If they decide to implement a monthly subscription fee like Netflix, which aligns with its YouTube TV strategy, then it would be extremely costly for the gaming companies to welcome that.
- Currently, there are many unknown answers to the questions including what will be the pricing and how many game developers will actually be bringing games to Google Stadia.
CLOUD SERVICE PROVIDERS
- Google has plans to incentivize the publishers “to bring as much of their backend as possible to Google servers”. The company aims to attract new customers to Google’s paid cloud computing program, but can also reach out to other private and public cloud services.
- One of the hurdles that Google will be facing is getting new games onto their platform that were never designed and developed to work on a cloud gaming platform, “let alone one that is based on Linux, as Stadia is.”
- Google Stadia is a distinct cloud gaming platform that focuses on streaming and content delivery instead of creating and selling physical consoles. This will potentially reduce the importance and usage of hardware on which players play their games.
- Stadia will reportedly be compatible with an existing USB controller or a mouse and a keyboard coupled with Google’s new custom controller for their gaming service. The only thing that would matter is having a strong and stable internet connection. Players might be able to access the service with any internet-connected hardware owned.
- If this cloud-based gaming platform overpowered the gaming hardware market, the demand for gaming console would diminish while declining PC shipments would plunge further with the end of dedicated gaming hardware era.
Impact on SONY
- Sony’s PlayStation 4 is the current leader in the video game console market with over 90 million units shipped worldwide since its launch in the year 2013. However, sales of the console have declined steadily in the past year, indicating that the gaming industry is ready for a new generation of console hardware to arrive. On the other hand, new cloud gaming platforms such as Google Stadia could eradicate the need for game hardware entirely.
- Stadia’s cloud gaming service enables players to stream video games directly with the help of remote servers that allow players to access the game remotely on their choice of a device such as cellphones or computer, provided they have a strong and stable internet connection.
- Players might only have to pay a subscription fee to access the games that previously required a PlayStation 4 with a cost of $300. This may lead to players not investing in console and gaming hardware.
- However, Sony is confident that third-party game developers would appreciate their user base of over 90 million and it is planning to rely on PlayStation hardware to keep users engaged with their platform. A few sources indicate that Sony is in the process of developing its new console hardware.
- Cloud gaming only requires a major investment in infrastructure management and servers, which the competing tech companies such as Sony could overtake. Apple, Google, Verizon, Amazon and Electronic Arts are all developing their own game streaming services.
- On the other hand, Sony and Microsoft have launched platforms that stream games to users from their respective consoles, but it’s unclear how far out these hardware companies have built an infrastructure that could underpin “a console-less future”. Moreover, Google’s existing infrastructure may give the company a bigger advantage here.
Google’s potentially sticky fact is that they have a habit of becoming disinterested in its less successful projects and initiatives. People may wonder if they should trust Google with their games as much as they would likely trust the established gaming companies such as Sony, Nintendo, and Microsoft. The gaming market is confused with concerns about the difficulty of game translation for Stadia, pricing plans, internet connection, and bewildered thoughts about Google’s shift in attention on to something else. Further, if both Sony and Microsoft launch similar systems that will allow users to access games irrespective of the device coupled with synchronization, then Google might find it difficult to win over the loyal players from either camps.
We commenced our research by finding the potential impacts of Google Stadia across the gaming value chain. We looked through credible news publishing websites such as Forbes, Thurrott, The Guardian, IGN, First Post, The Verge, and Business Insider. However, we were not able to find any pre-compiled information about the impact on gaming value-chain. These articles only covered information about the Google Stadia launch and details about the platform. We had to change our strategy to compile relevant facts and information from these websites to present the potential impacts of Google Stadia across the gaming value chain. We’ve presented these findings in the research.
Further, we were not able to find any pre-compiled information about the impact of Sony’s gaming value chain in specific on any news publishing, technology, game-centric, and reports publishing websites. We only found general information about how cloud-based gaming platforms and Stadia will impact Sony's gaming market. We've presented these impacts in the research.