Google announced this Thursday, the 29th, the end of its cloud gaming project, Stadia. In a note posted on the company’s website, Phil Harrison, Google’s vice president and general manager of Stadia, said the service didn’t “gain traction with users who expected it” so “they made the difficult decision to close ” service.
On the other hand, Harrison explained that the technology behind Stadia proved to be “scalable” and “goes beyond games”. Soon, the assets of the game service that was launched in 2019 can be applied to other Google products, such as YouTube, Google Play, augmented reality and offered to other partners.
The executive also said that the company will continue to work on games, whether investing in new tools, technology, platforms for the developer ecosystem, industry partners and Google Cloud customers. Harrison also acknowledges that many of his team’s employees will be leaving Google, but did not reveal how many.
All user investments in hardware, games, and game add-ons will be recouped by early next year. Stadia will officially shut down on January 18, 2023.
Analysis – The Perfect Storm
Within Stadia, the industry’s first yellow light came on when the company canceled game development early last year. Another problem with the platform is the fact that Google does not have partnerships with operators, in a service that for each game downloaded had an average consumption of 10 GB of exclusive by its user, which made it impossible to scale and its business model .
In addition, Google’s parent company Alphabet has suffered a severe financial setback this year. The drop in profit from $18.5 billion to $16 billion in the second quarter of 2022 was due to high investments in the cloud and the loss of advertisers (the main source of revenue).
Initially, Google would only ban new hires. But Sundar Pichai, CEO of Google and Alphabet, recently confirmed that the company will make cuts to improve its efficiency.