How Google Stadia let Xbox win

How Google Stadia let Xbox win

I started my career in risk management before eventually returning to my original passion – computing. Risk managers are always on the look out for opportunities and ways around problems. Watching companies flounder as a challenger enters the industry – or as technology changes – has always fascinated me. And seeing companies survive and thrive even as they looked beaten is even more exciting.

Companies that failed

It’s interesting to look back on industries that have been severely disrupted. Kodak once stood like a Colossus looking down on the photography industry relatively unchallenged. And then it invented the digital camera and suppressed it rather than risk its core business. This, of course, led directly to Kodak’s demise as others reinvented the digital camera and left Kodak too little time to pivot.

Sears was such a big company before the internet that it built the world’s tallest skyscraper in Chicago. But it failed to grasp the internet and a plucky online bookshop managed to steal all their business. You may have heard of Amazon. And in the last few years we have seen Ford and GM let Tesla take 79% of the market for electric cars. The type of cars that will be the only option within a few years.

This article is about video games though. And before we get too far, I should say I have a small shareholding in Microsoft. I do not believe it has influenced me unduly. Let me explain why.

Google Stadia

When Stadia was announced my spouse and I owned a Nintendo Switch, but we did not have what one might call a flagship games console. In fact my games console owning history has not been one of owning the cutting edge: Gameboy, GameCube, Wii, second hand Xbox 360, Switch.

Because I didn’t own a PlayStation nor an Xbox One, I thought perhaps Stadia was a great idea. Stadia offered AAA games without having to buy the console. And I wasn’t wrong. I greatly enjoyed Assassin’s Creed: Odyssey, Assassin’s Creed: Valhalla, and Dead by Daylight on Stadia. Most of the time, it works as though you have a games console plugged into the TV. Stadia lets you play in your browser. When doing so your PC behaves as though it’s a fully-powered gaming machine but without the fan noise.

I got in on the ground floor. I bought a Stadia Founder’s Edition which came with a Chromecast Ultra and a uniquely coloured Stadia controller. So let’s get this out of the way: Stadia is great and it’s a great idea. With the right investment from Google, I truly believe it could have won the console wars.

With the right investment from Google, I truly believe Google Stadia could have won the console wars.

Google’s lack of vision

But it didn’t. Google failed to convince some developers to release their games to it. Among those AAA games that did release, FIFA 21 was released five months late and did not have crossplay. The only online multiplayer games that work on a platform with few gamers are those that have crossplay. This shouldn’t require a risk management team to work out. If you do not have many players on your platform, you cannot expect them all to be waiting in the lobbies of various games at the same time.

Lack of investment

Google also failed to invest in first party games – games that might have been a draw for gamers on other platforms. No-one can fail to remember which platform Mario, Sonic, or Halo games are from. And Google needed to have something similarly iconic. In fact it closed its first-party game development activity only a year after the launch of the service.

Additionally, Google failed to market the service effectively. Most people, even today, have not heard of Stadia. When they see my games controllers in the basement, they say “Wow” and then they ask what the controllers on the left are for. If your potential customers have heard of Xbox, PlayStation, Switch, and even Steam, but have not heard of Stadia, you’re already on the back-foot.

Windows Central has a recent article about the release of Diablo II: Resurrected. “… available on all platforms” it says, without listing Stadia.

But it isn’t just awareness – Stadia has a subscription option that increases resolutions and includes some quasi-free games. This element confused people all the time. Reddit conversations about Stadia always included people saying “I don’t want to pay $10 per month for crappy games” to which the answer is “You don’t have to”. But if the few people who have heard of it, think you have to pay when you don’t, the marketing has failed completely. If only Google knew something about advertising…

Xbox Cloud Gaming

Stadia launched in 2020 just as Microsoft’s Xbox division released Xbox Cloud Gaming. This only works on a PC unless you own an Xbox, but it has many of the same games as Stadia, but many, many more (including most of EA’s catalogue). It isn’t the same offering – with Stadia you can buy games to own, whereas Xbox Cloud Gaming is more like Netflix where the games are available while Xbox makes them available – but it’s pretty close. And if you are in the Microsoft gaming infrastructure at all, then Xbox Cloud Gaming suddenly becomes a no-brainer in terms of value.

Unfortunately for Stadia, Xbox Cloud Gaming is also not terrible at its streaming capabilities. Google was expected to have the lead when it came to leveraging their internet-knowledge, but Microsoft – with their Azure service (and Amazon with AWS / Luna) – were more than up to the challenge.

Like Google, I would argue that Microsoft has failed to market their Xbox Cloud Gaming solution, but as it’s just as perk on top of an already compelling Xbox Ultimate subscription, it doesn’t really need marketing independently. Also, as I do not have cable, and because I work from home and have YouTube Premium, my exposure to advertising is relatively limited – perhaps there is more advertising happening but I just don’t see it?

All-in Microsoft

I bought Android phones from the beginning – my first was an HTC Desire. I shunned the Apple iPhone at first because I had a top-of-the-range Nokia, and then because Android phones seemed better value. As the home automation and assistant market started to heat up, I bought a Google Home (and received several for free through other promotions). I had Google Drive, YouTube Premium (then known as YouTube Red), Google Stadia, Google Nexus phones (and now a Pixel 5), etc. I received three Stadia controllers for free through Google promotions. I was completely in the Google ecosystem.

$9.99 per month for 1TB of storage for six people, including Microsoft Office
$9.99 per month for 2TB from Google

Google Drive vs. Office 365

And then Google increased the price of Google Drive. They priced it higher than a Microsoft Office 365 subscription which came with 6Tb of storage as well as Word, Excel, PowerPoint, etc. At that point I dumped my Google Drive subscription completely and started using Office. Then I saw Microsoft Phone Link software in Windows 10 / 11 and the Microsoft Launcher, and the shared clipboard, and Microsoft Edge, and Microsoft Authenticator, and slowly my Google-made phone became a Microsoft device.

Xbox Series X

When I was lucky enough to find an Xbox Series X for sale, my Stadia controllers started to gather dust. Like many others, I have abandoned Stadia. Stadia had so much promise, but Google shunned me as a customer by over-pricing Google Drive, and then singularly failed to invest in its online gaming service. Google Stadia is the Atari Jaguar and Sega Dreamcast of the 2020s, and its Google’s fault.

I have said it before, but Microsoft’s inclusion of the Amazon AppStore on Windows 11 might be a game changer. If Microsoft launches its own phone system again, I will be on it in a second. I am all-in on Microsoft’s ecosystem and it’s only a matter of time before Google steps up, or Microsoft starts to seriously erode their non-advertising market-share in my opinion.

What do you think? Am I being overly optimistic on Microsoft’s behalf? Had you heard of Stadia or do you still think it’s got a chance? Can Google win just through Android and Google Home devices? Let me know in the comments.

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