Google Stadia is shutting down – Meta should take notice

Google envisioned its cloud gaming service as a Netflix for video games but quickly pulled the plug once it became clear the project would fail. Its problems were similar to those Meta faces in its metaverse gamble.

Google announced it was discontinuing the Stadia game streaming service last September, three years after it was launched. It said it made the "difficult" decision because the service was underperforming.

"While Stadia's approach to streaming games for consumers was built on a strong technology foundation, it hasn't gained the traction with users that we expected," Google said.

Stadia users could stream video games via a compatible TV or a smartphone without owning a games console.

Stadia received mixed reviews upon its launch in 2019 and couldn't recover from that – even when it improved later on: the long-anticipated Cyberpunk 2077 ran relatively smoothly on the platform compared to its tumultuous launch on games consoles like Playstation 4 and Xbox One.

What happened?

The service was criticized as too expensive, it needed more features, and its library offerings remained limited. While Google initially planned that Stadia would offer both in-house games and third-party titles, it swiftly dropped the idea, closing its own studios early in 2021.

The failure of Google Stadia is not dissimilar to Meta's troubles in the metaverse, according to Richard Gardner, CEO of cloud computing company Modulus. However, he said that Google was "much more willing" to accept that the industry landscape was not shaping in its favor.

"Their shareholders will appreciate that they've pulled the plug quickly instead of in a protracted manner," Gardner said.

While large companies can splash out on new ventures, they struggle to compete with smaller, more agile firms in emerging sectors like cloud gaming or the metaverse.

"The culture of these firms, and the culture of the niche that Big Tech is attempting to enter, give them an innate advantage," Gardner said.

Google also failed to compete with cloud gaming services run by established players such as Microsoft's Xbox Cloud Gaming and Sony's Playstation Plus. There are also Amazon's Luna and Nvidia's GeForce Now – even though these are less popular services.

What's next?

Google said it would refund all Stadia hardware purchases made through the Google Store and all game and add-on content purchases made through the Stadia store.

Players would have access to their games library and play all through January 18, 2023, when the service would shut down, Google said. The company also said it expected most refunds to be completed by mid-January.

Third-party games developers, including Ubisoft and Cyberpunk 2077 creator CD Projekt Red, announced Stadia users would be able to download their games free of charge and pick up from where they left – but had to do it by January 18 or lose data.

Google said it would apply Stadia's underlying technology across other parts of its business, including YouTube, Google Play, and augmented reality efforts. It said it would also make it available to industry partners.

The discontinuation of Google Stadia is not expected to impact the cloud gaming industry significantly. According to Gardner, it has larger implications for Big Tech's "ongoing dalliances in other arenas" than cloud gaming.

In fact, the field is set to become even busier with Netflix announcing last year that it was "seriously exploring" the idea of cloud gaming – and perhaps keeping the "Netflix for video games" title for itself.