Google is getting into gaming in a serious way. The Alphabet unit unveiled Tuesday a new game streaming service called Stadia at the Game Developers Conference in San Francisco. The announcement marks a major new foray into the $180 billion industry for the internet giant. Stadia lets developers build new games on a streaming platform that will allow players to access the action through the web instead of having to buy expensive consoles or personal computers. The company
also introduced its own game controller, which creates console-like gaming on a computer or smartphone.
Alphabet shares rose less than 1 percent in New York. Google already has a hefty
presence in gaming through its Android app store, one of the most popular mobile
game marketplaces. But the search giant and peers like Amazon.com Inc.,
Facebook Inc. and Apple Inc. have less of a central role in the lucrative hardcore
gaming market, which still runs on hardware like Sony Corp.’s PS4 and Microsoft
Corp.’s XBox and has spawned a huge e-sports entertainment industry. With Stadia,
Google is aiming to bring more complex games to more people. “There’s no word on
pricing, what’s the revenue model?” said Joost van Dreunen, co-founder of gaming
research firm SuperData.
“It’s a little bit like saying we’re going to start a restaurant but we have no idea what
cuisine we’re making.” Stadia runs through the company’s YouTube video-streaming
platform and takes advantage of Google’s extensive network of data centers. While
the company didn’t announce a price for the service, it said artificial intelligence
technology helped make the product possible. With its presentation, Google drove
home the point that its technical tools alone would make the future of gaming
services work.
It repeatedly mentioned the advantage of its cloud-computing power and YouTube,
suggesting the service is designed to bring more users to those units -- two areas
where investors are looking for sales growth beyond advertising. “Google’s pitch of
leveraging infrastructure and YouTube to enable cloud gaming is a logical extension
of their strengths,” Waral said. “The question is, can the content and experience
compete with Sony or Microsoft?” That’s what investors should look for in the next
few months: Whether Google can persuade big game developers to bring their
content to Stadia, and at what price, van Dreunen said. That could cost the internet
giant hundreds of millions of dollars.
