Google Stadia’s shutdown is leaving a giant mess in its wake
Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Tuesday, we’re taking stock of the Stadia shutdown and the ripple effects of Google’s plans to close its cloud platform. Also: plenty of new developments in the Activision Blizzard saga, as well as the end of Overwatch 1 as we know it.
Stadia shutdown leaves partners and players in the lurch
When Google announced the closure of its Stadia cloud gaming platform last week, the news was delivered at roughly the same time to employees, partners, and players on Thursday morning. Within hours, it had become clear that Stadia’s shutdown, planned for next January, would involve more than just refunding consumer purchases and quietly bowing out.
Now developers are scrambling to salvage planned projects, migrate players to other platforms, and figure out whether they’re still owed money from Google before the search giant puts Stadia out to pasture for good.
Stadia’s shutdown came as a surprise. Scores of indie game makers, not typically bound by the conservative norms of corporate PR, took to Twitter to explain their frustrations upon learning of the shutdown from news articles and a terse five-paragraph blog post from Stadia chief Phil Harrison.
- “Tangle Tower was due to launch on Stadia in 2 days time, and this article was the first I heard about it shutting down,” SFB Games co-founder Tom Vian tweeted on Thursday.
- “We have a title coming out November 1st,” Rebecca Heineman, CEO of indie studio Olde Sküül, wrote in response to Vian. “Now we hear about this.” Olde Sküül has since announced it will release its planned Stadia game, Luxor Evolved, on console and PC in 2023.
- “We have a game coming to Stadia in November. Who wants to guess that Google will refuse to pay us the money they owe us for it,” tweeted Mike Rose, founder of British game publisher No More Robots. “Hours later and I still have no email from Stadia, and no clarity on what’s happening with our games, deals, anything.”
- Necrosoft Games creative director Brandon Sheffield was quick to point out how strange it was that Stadia released a new software development kit just two days prior to the announcement.
- Necrosoft Games was planning a sequel to its Stadia exclusive game Gunsport, and Sheffield told The Verge he has no idea if the publisher will be able to release Gunsport on other platforms or receive some type of reimbursement.
- “We were having marketing discussions [with Stadia] just last week,” Sheffield said. “So it’s unfortunate all around, as I think the platform was gaining some good traction.”
It wasn’t just indies caught off guard. Google’s Stadia announcement kicked off a wave of uncertain responses from major third-party partners, including Bungie, CD Projekt Red, and Ubisoft. The consensus: We’re looking into it.
- Ubisoft has been Google’s longest cloud gaming partner, having given the company Assassin’s Creed Origins to test Stadia’s Project Stream predecessor. And with 38 games on the platform, Ubisoft said on Friday it was “working” to allow Stadia customers to bring those purchases to PC but had nothing more to share.
- “We hear you - we are looking into ways for you to continue your HITMAN experience on other platforms,” wrote Hitman developer IO Interactive.
- “All I can say now is that we’re currently looking into the matter, and exploring possible options,” a representative of Cyberpunk 2077 studio CD Projekt Red told The Verge.
- “We just learned about Stadia shutting down and have begun conversations about next steps for our players,” a Bungie representative posted to the company’s Destiny 2 forums.
- One player of the online component of Rockstar’s Red Dead Redemption 2 who logged more than 6,000 hours into the game for Twitch and YouTube content has no idea if they can migrate their account off of Stadia. Rockstar has yet to respond to Stadia’s shutdown.
It’s not clear why Google axed Stadia now, and why it did so with little to no warning for any of the various parties that invested time, money, and other resources into the platform over the last three years.
- Google is undergoing a serious cost-cutting effort at the moment to contend with the economic downturn. And Stadia was expensive: Last year, Bloomberg reported that Stadia spent tens of millions of dollars just to secure rights to a single big-budget release like Red Dead Redemption 2.
- CEO Sundar Pichai said last month he wants to make the company “20% more productive,” and hiring slowdowns, the cancellation of a new Pixelbook, and other cost-cutting efforts may have pushed Stadia toward the chopping block.
- Stadia arrived on the gaming scene with big ambitions in 2019 that included developing original exclusives that would make use of the platform’s cloud computing advantages.
- But Google’s internal studios were shuttered less than 18 months after launch, and many of its ambitious cloud features like State Share never made it to more than 10% of the platform.
- Ultimately, Stadia chief Harrison said the main culprit was a lack of growth: “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.”
- "The number one problem is the business model. Secondly, you need to deliver something consumers cannot get elsewhere," said Benjy Boxer, the co-founder of game streaming platform Parsec who now oversees the product at Unity. "In my opinion, the only way cloud gaming will ever shift to the mainstream is if we get to a point where we’re not selling the distribution technology and instead selling a unique value proposition."
- Boxer said Stadia had "amazing technology" but failed at selling coherent product and experience. "Stadia never figured out who their customer was," he added.
It’s perhaps too early to draw broader conclusions about Stadia’s closure, what it could mean for cloud gaming as a whole, and whether the platform’s demise is the nail in the coffin for Google’s gaming ambitions. But Google’s sloppy handling of the announcement and Stadia’s stunning failure is evidence that even the largest, most experienced companies can find themselves lost in the woods when trying to crack such a notoriously difficult set of problems.
Cloud gaming is still available on platforms operated by Microsoft, Nvidia, and — for the time being — Amazon, too. But developing games is costly, difficult, and multidisciplinary work that takes years, and streaming those games over the cloud has yet to be accomplished in a sustainable fashion with an attractive business model. Google found this out the hard way, and let’s hope Stadia’s shutdown provides the road map that helps keep its competitors alive.
— Nick Statt
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“I’m not proud that I had a hand in furthering these problems. As a matter of fact, I tell my daughters that I make board games like the ones they play at school. Whenever I encourage my daughters to strive to make a positive difference in the world, I question whether I have done the same.” — William Siu, the co-founder of mobile game studio Storm8, wrote an op-ed for The New York Times this past weekend decrying his own creations and the habit-forming design employed by many free-to-play smartphone titles. Siu says he does not let his daughters play his games.“The reason for dissolving the cultural organization is that it no longer represents the ethos it was founded on. People and ideas are meant to be eternal; organizations may well be temporary. I find that the organization was successful overall and most of the mistakes that were made were contingent, determined by the sociocultural conditions we were thrown into.” — Martin Luiga, a founding member of the ZA/UM artist collective that went on to develop indie masterpiece Disco Elysium, published a blog post on Saturday confirming that many of the game’s central creators have been pushed out of the studio.
In other news
Saudi Arabia is planning a huge gaming investment blitz. The Saudi-backed Savvy Gaming Group will pump an additional $37.8 billion into game companies on top of the government’s existing investments in Activision, EA, Embracer Group, Take-Two, and Nintendo, among others.
Sony sets an ambitious goal for PlayStation VR2. Sony expects to sell 2 million units of its VR headset sequel by March 2023, Bloomberg reported Sunday. There’s no pricing or a release date yet, but the report says production started last month.
Sega is getting into blockchain gaming. The Sonic publisher, which has expressed interest in NFTs in the past, announced a new game with Japan-based Double Jump Tokyo that will make use of blockchain tech in some fashion.
Newsy is rebranding as Scripps News next year. The over-the-air and streaming channel, which will make use of Newsy’s team as well as the national news desk of local Scripps stations, will go live Jan. 1.
Microsoft’s next big Activision battleground is the EU. The EU has set a Nov. 8 deadline for its regulatory arm to either approve the deal or also head into a second, more detailed phase, as the U.K. recently did. Sony boss Jim Ryan also visited EU headquarters last month to argue against the deal, VGC reported.
Activision exec will exit. Frances Townsend, the publisher’s chief compliance officer, is stepping down, Bloomberg reported Friday. She came under fire last year for downplaying sexual harassment claims against the company.
YouTube is asking some people to pay for 4K streaming. There’s no word on whether this is part of a test or a new strategy to sign up more paying viewers.
Another games media shuffle. Fandom, the entertainment wiki hosting site, has purchased GameSpot, Giant Bomb, and other properties from Red Ventures, which two years ago acquired them from CNET parent CBS Interactive. It’s been a rough month for the games press.
Saying goodbye to Overwatch
Around noon EDT yesterday, Blizzard shut down the original Overwatch. If you went to log in to the game, you were met with a “lost connection to game server” message overlaid on the title screen.
- For dedicated fans of the hero shooter, which amassed tens of millions of players since its launch in 2016, it was the end of an era.
- The memes and genuine sendoffs have been flooding social platforms over the past few days.
Starting today, the next chapter begins in the form of Overwatch 2, which launches as a free-to-play early-access game on all major console platforms and PC.
- It’s been a long, and rather bumpy, road to get here, highlighted by the fact that Blizzard never intended to completely remove the original game, but instead support it alongside the sequel.
- But the transition to free-to-play, alongside a major delay and internal shakeups amid Activision Blizzard’s reckoning with its culture of sexual harassment and discrimination, has resulted in a much different product than was originally promised.
It’s a risky gamble, yet likely a necessary one as Blizzard tries to drag the franchise into the future and position it for a vastly different gaming landscape than when the original Overwatch arrived more than six years ago.
— Nick Statt
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