Google Stadia is shutting down their internal game studios

Google are shutting down their two internal game studios and changing the direction of their Google Stadia game streaming service, in a surprising (but predictable) come down from their intention to challenge PlayStation and Xbox for the future of gaming.

Google’s two game studios in Montreal and Los Angeles are to close, with around 150 developers affected – Google will try and find them other roles within Google – while game producer Jade Raymond is also leaving the company.

While Google will still run Stadia as a public-facing game streaming service, as well as offer its $10 a month Stadia Pro subscription, they will now start to offer its Stadia tech to publishers, for them to roll their own game streaming solution – this is similar to what we’ve seen with games like Hitman 3 having a streaming option on Switch. However, with Stadia no longer set to receive exclusive titles, Stadia’s future is now rather different.

Already a notably capricious company when it comes to business outside of their main search and advertising money-spinners, Google’s change of heart seems to have been down to the cost of doing business. Writing on their blog, Phil Harrison said:

Creating best-in-class games from the ground up takes many years and significant investment, and the cost is going up exponentially. Given our focus on building on the proven technology of Stadia as well as deepening our business partnerships, we’ve decided that we will not be investing further in bringing exclusive content from our internal development team SG&E, beyond any near-term planned games.

Strange considering how rich Google is as a wider company.

Stadia’s business model is an outlier compared to the handful of other game streaming services out there. All of their competitors (PlayStation Now, Xbox Game Pass Streaming, and Amazon Luna) have a subscription model that included a broad library of games, instead of charging retail prices for access and upselling 4K gaming.

What’s absolutely clear is that Google have lost patience far before they could have reasonably seen a return on their investment. Modern AAA games often take 3-4 years to create, and that’s before you take into account that a game studio is being founded from scratch. While Google had started to make their moves in 2018, hiring Jade Raymond to be a VP of Stadia Games and Entertainment, there simply wasn’t enough time to create something out of that.

What is fair to say is that Stadia still has some of the widest reach technologically compared to its rivals, with a very well-establish server network that can tap into TVs, Android phones and computers. Their 4K streaming is also impressive, and while games haven’t always run at 4K or 60fps, there have been a number of big wins, from Assassin’s Creed Odyssey at launch providing a compelling look at how the service could evolve, to innovative server-based gameplay quirks for GRID, Ghost Recon Breakpoint and Hitman 3, and even just being able to run Cyberpunk 2077 competently. It’s those partnerships that Google can hope to keep creating.

Stadia as a service looks set to stick around a while longer, and the technology can surely continue to grow and evolve, but it’s effectively dead in the water as a true challenger to Sony and Microsoft.

Source: Kotaku, Google