REQUEST A DEMO






WHICH SOLUTION DO YOU WANT TO SEE LIVE?
Channel Sales Insights
Market Insights
Data Services


Resources

This time it’s different – why the obsession?
<< Back to all resources

This time it’s different – why the obsession?



Stadia Controller @Google

The video game media and gamers alike seem to be captivated about tomorrow. The announcement of Google’s Cloud based streaming service Stadia was met by many with the chorus “this is it - streaming will be the future of gaming”.

Is it?

Currently the gaming industry is in robust health. According markets tracked by Games Sales Data (GSD) spending on network full games increased by 5% in the first half of 2019*. This was before any announcement of Google’s Stadia and not accounting revenues from DLC.

Those who follow the gaming news these last 20 years have seen similar predictions that new technologies will disrupt sales and take over what it means to play games. There was great anticipation that the release of the Kinect, peripheral gaming (e.g. Guitar Hero), 3D gaming, social gaming, Toys-To-Life, mobile gaming, free-to-play games, microtransactions and VR will be the catalyst that changes everything. All these technologies were going to change the gaming landscape forever and they were herald as the future of gaming. The fact is that only some of these predictions came partly true. Some like mobile gaming have seen revenues grow with every year but that may to do more with the popularity of smartphones and the convenience of killing time with a casual game than any specific business strategy. Microtransactions, a spin on DLC, were first introduced to fill in revenue gaps among free-to-play games and then they metamorphosed into loot boxes. It looks like microtransactions are here to stay but they have not replaced full priced games. Other game changers have almost exited the industry altogether such as the Kinect games, 3D games and Toys-To-Life. VR is struggling to make itself popular as the elusive “killer app” – the compelling reason to buy into VR - is still missing. Remember when VR was going to be massive, until it wasn’t. Now here we are with Cloud gaming. It is supposed to be the “future”, except there is one valuable piece of information that most people forget – Cloud gaming is not new, it has around since 2010 with the inception of OnLive.

The spectacular crash and burn of OnLive in 2015 temporarily put to bed the idea that Cloud based gaming was the future after its short-lived existence. If you search Cloud based gaming on Wikipedia you can find over a handful of companies who already provide such a service including PlayStation Now and Nvidia’s GeForce NOW. PlayStation Now gives the option for consumers to download their games to their PS4 to address latency issues and GeForce NOW is limited to either a PC or a Nvidia Shield. They have not put Cloud based gaming on the map among the casual gamer.  

Some people cheer “this time it’s different because Google is behind it”. True, Google is a huge company with a lot of money to support Cloud gaming and the fact you can stream from a multitude of devices that have connectivity is a major selling point but herein lies the problem. Google needs to make money and so do the publishers who support Stadia. Unlike Netflix, Google has not invested billions of dollars in making original content. Stadia’s pricing model is like OnLive and we know how that ended. With the basic package you need to buy games out right before you can stream. In many cases the games will probably cost more than buying it used physically or from a digital store in a sale. And unlike Netflix where you pay a monthly fee for a vast library to watch from, Stadia is not that. Even the Stadia Pro package which comes in at $9 a month offers a limited selection of discounted (not free) games. In addition, you will need a stable and strong internet connection, good luck finding that in a hotel room. What about the U.S. where most consumers still have their internet capped? Mobile gaming which has an advantage that the imbedded controller is the device itself, or the Switch, which have Joy-Cons and a screen, if you intend to game with Stadia while travelling you must remember to bring a controller.  

Some people will say that Stadia’s biggest selling point is the requirement not to own a console machine. But this is coming after two of the most successful generations of console hardware sales worldwide ever. Both Sony and Microsoft have announced that their next generation of consoles will support physical media. Given how import holiday sales are for the industry, physical media still has a major stake in the market.  Today gamers with an Xbox, PlayStation or PC can already play their game libraries remotely and the Switch has melded the high fidelity of console home gaming with mobile gaming successfully.

The question then becomes who is left behind that Stadia will appeal to? After the excitement generated with the announcement of the PS5 and Xbox Project Scarlett, who is left that does not want to own a gaming machine yet still be interested in playing the latest games at 4K resolution, especially when you add the cost of Stadia Pro.  

There is a phrase known as Fear Of Missing Out (FOMO) and it could be this anxiety, born out of the desire to stay current in the age of the internet that is driving many to speculate that Cloud gaming is the future. A combination of first to market and bragging rights to friends is fuelling a desire to show off new technology without first questioning “do I really need this?”

Is Cloud gaming the future of gaming? Who knows, I wish Google all the luck in making Stadia into a success. The most important thing is that Stadia will most likely increase investment into game development which will benefit us all. Tomorrow can wait.   


Sam Naji
Consultant and analyst at B2Boost

 

*Territories include Europe, Oceania, Middle East & Africa