Last week it was announced that Google was shutting down their game studio which was going to be creating original games for their Stadia gaming service. This news has of course been meet with concern from many, but others have wondered why this is a big deal. After all, Stadia has existed for a year without original games, why should this change anything?

Commitment to Gaming

The big concern brought up from lots of people, including myself, when Stadia launched was basically this:

Google cancels products all the time, so why would I buy games from a service that 100% requires that service to be online and well-maintained?

The counter to that argument was that Google was really serious about gaming and that this was not something they were going to throw in the towel on anytime soon. They were in it for the long haul.

Closing their internal game studio is not a great indicator that they are willing to commit to video games for the long run. While this doesn’t strictly mean that the streaming service is next, it does mean that this is far from a “success at any cost” business for them and if Stadia doesn’t live up to their internal metrics, it may not be as safe as many would like to think.

Consider Nintendo

Consider this studio closing by a platform holder from another angle to get an idea of how this looks to those of us who have followed gaming for decades. While it may be an imperfect comparison, Nintendo is also a platform holder with internal game studios. Their platforms (Switch and 3DS) have tons of third party games on them, as well as their own exclusive titles.

If later today Nintendo announced they were closing their internal studios and they were just going to focus on making hardware going forward, how would that make you feel about Nintendo? Not great, right? You could certainly argue that they have tons of third party content on the Switch that will still be available, but come on…you’d be skeptical has hell about their future.

Exclusive Games Make All the Difference

Most gaming platforms have all third party games on them these days. Nintendo has Mario, Zelda, and literally dozens of other massive franchises. Sony has God of War, Uncharted, Spider-Man, and many others as well. And even Microsoft, who has fewer exclusives than those other two, has been spending billions of dollars to buy up studios to catch up in the exclusive content game.

Exclusive content matters a ton, and while you could argue that Stadia will be different, I would say that 30 years of following the games industry makes me very skeptical that they’re going to buck the trend.

Stadia’s Technical Advantage

Of course Stadia is different from the other big platform holders, right? Their games run in the cloud and stream down to your devices (any devices!), thereby skipping the $200+ investment in a home console.

But…

Microsoft has Xbox Game Pass, which not only gives you access to a huge library of games, also has a cloud streaming option that is currently rolling out to more platforms. Sony has been doing this for years with PlayStation Now, which offers mostly older games, but also has apps in numerous platforms. And even Nintendo is in the game a bit with cloud versions of some AAA games on the Switch (technically similar, but Nintendo is definitely not as invested here).

I’m skeptical that Stadia’s technical prowess is going to be distinct in comparison to their competitors for long. Game Pass already works great and I’ve used it on my Android phone a few times to great effect.

When the ability to stream games over the internet to any device becomes table stakes, then what are we going to look at to decide what platform to use? Exclusive, first party games. Just like Netflix, HBO, and Hulu compete for customers with exclusive content rather than video streaming quality, that’s going to make the difference in video game streaming as well.

Takeaway

My takeaway is simple. I have not been a fan of Stadia from the start, I don’t plan on giving them any more of my money, and right now I’m bearish on their future. Maybe they’ll surprise us and do something that changes that narrative, but right now it does not look good.