Google has shutdown Stadia — What's next for cloud gaming?

Google announced that it's shutting down its cloud gaming service Stadia. The service will remain up for use until January 18, 2023. In a blog post, Stadia Vice President Phil Harrison wrote: "[W]hile 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."

Harrison states that other parts of Google will benefit from Stadia's technology, namely YouTube, GooglePlay and Augmented Reality (AR).

This news comes on the heels of Logitech's recently announced G Cloud Gaming Handheld and Razer's handheld partnership with Verizon. The device is supported by Verizon's 5G Ultra Wideband to ensure that it is truly portable. Designed for streaming from the cloud, a personal console or an app, the Edge 5G is an example of multiple Internet of Things (IoT) production companies banding together to get a slice of the cloud gaming pie. And yet with other handhelds, like Valve Steam Deck, which is still taking reservations to order, and the Nintendo Switch, which just hit 111 million units, demand remains high.

Just last month, the cloud gaming market was expected to exceed a $5 billion worth by next year, with increases of up to 364% from 2021's valuation. If Google's cloud gaming service struggled to find an audience, there may be room for doubt. So the question becomes, "Where did Stadia go wrong?"

The answer rests at the feet of Google management. Despite the massive projections listed above, Stadia wasn't consistently supported, failed to communicate with its player base and only had a very limited number of games. Further, when Google shut down its first-party games development, the writing was on the wall. At least in the midst of the shutdown, Stadia offered a first: Full refunds for games, expansions and downloadable content.

Stadia didn't have the support it needed. Even with the juggernaut that Google is by their side, shutting down dedicated development was a signal to critics of the end times. Most big-budget games take years to develop, but Google closed Stadia's doors barely a year after its launch. And with this closure, big-name developers that offered games on the platform were left in the dark. "Bungie's Destiny 2," stated on forums that they didn't know of the shutdown until it was announced publicly.

The long and short of it though is that cloud gaming isn't dead. Xbox Game Pass hit 25 million subscribers this year. Nvidia's GeForce Now is popular. Amazon recently announced that their service Luna will now be available on Samsung TVs. As the technology continues to develop, cloud gaming may very well exceed projections to offer gamers the experiences they crave.

Perle Systems provides technology essential to cloud gaming via our Data Center Management, including for clients like Verizon, Microsoft and Intel. For more info, reach out for a conversation with a member of our team today.