For a long time, games have been played on consoles or your computer. It was always necessary to first buy a console, then buy a game and only then were you able to play your favourite game. This business model has been changing in the last few years. For some years, we are able to buy games from the console store, rather than having to go to a physical store. However, the need for a physical console to play on, persisted.
Until Google recently revealed their newest service; Google Stadia. Using their cloud computing infrastructure, Stadia is able to deliver up to 4K image quality at 60 frames per second depending on the user’s internet speed. In addition, you can now game on your phone, television, iPad etc. without the need for a physical console and switch seamlessly between those. The service even includes some games that are free to play, accessible at any time, from anywhere. The only thing you must buy upfront is the Google Stadia controller that is needed for playing the games. This reduction of upfront costs will increase the accessibility of games.
However, there are some downsides to the service as well. Since you are “streaming” the game, it introduces additional latency, which hardcore gamers are not willing to accept. Also, players are limited in their chosen peripherals, as they can only use the controller and not their keyboard and mouse or any other peripheral for that matter. Lastly, the consumer still has to buy most games. While some games will be offered for free, most premium and well-sought-after games are not.
In the future, these negative features can be overcome by improvements of the technology. When this happens, incumbents have to fear losing their business. The extra flexibility, power and reduced upfront costs offer make it that Stadia offers better value than the traditional consoles. Microsoft and Nvidia are already implementing a similar technology, but PlayStation seems to fall behind. What do you think, are physical gaming platforms at risk of being substituted?
https://store.google.com/product/stadia?gclid=CjwKCAjwldHsBRAoEiwAd0JybeO0PxD2x8JaZOMjIiN6KDKu0M4GUtvxhSf59KFyUWnPKqArAX_gZhoCUpsQAvD_BwE
https://www.theverge.com/2019/6/10/18659967/microsoft-xcloud-cloud-gaming-public-test-google-stadia-e3-2019
https://www.nvidia.com/nl-nl/geforce/products/geforce-now/
Hi Norbert, I like your insight on this subject.
The disruption in the gaming industry will be coming. However, I don’t think the ‘traditional’ gaming platforms (i.e. PS4, XBOX, and PC) are losing much ground. These gaming platforms feel the upcoming changes and are adapting to them; PS4 has Remote Play; XBOX is working with xCloud. PS4 and XBOX both have huge companies supporting them, Sony and Microsoft. E.g. Sony reported last summer a total number of 100 million of PS4 consoles sold (https://www.theverge.com/2019/7/30/20746712/sony-playstation-4-sales-100-million-milestone), with 36,3 PS plus users in december 2018 (https://www.statista.com/statistics/532431/playstation-plus-subscribers-global/). These sales and subscriptions will probably make it evident that Sony (and Microsoft) will be competing with brute force.
If Google Stadia wants to dominate the market, they need to attract the PS4 and XBOX users. I do think there are some opportunities, I don’t think they are feasible. In my opinion Gamers play for multiple reasons: to hang out with friends, and to entertain themselves. Google needs to have influencers and big gamers on their platform in order to attract a community. Also, they need to differentiate themselves through game releases to enabling the entertainment potential to customers. PS4 and XBOX already have a solid community and great games. So their customers will not go to Google. And the PC gamers really love being able to use a keyboard and mouse. So these gamers will not go to Google as well. Therefore, I do think the industry is changing. I don’t think Google will make a big difference.