Google Stadia set to revolutionise the future of gaming

Google Stadia cloud gaming
The world of gaming is set to go through yet another transformation thanks to Google Stadia.

The world of gaming has been through multiple revolutions in its history but what Google has in mind with its Google Stadia project could be the most terraforming yet.

The company’s chief executive officer Sundar Pichai presented an incoming gaming industry bombshell at the Game Developers Conference (GDC) in San Francisco – a revolutionary new way for games to be delivered to consumers while enabling more people to play the most cutting-edge games.

Google Stadia embodies what Google has become known for as it became one of the largest companies in the world – being able to achieve more with less.

Old time gamers will remember the shift from arcades to consoles in the 1990s. Even more gamers will recall the transition from consoles to computers as gaming studios yearned for more processing power to satiate market demand for bigger and better games.

The 2000s ushered in one of the biggest breakthroughs in the video game industry whereby technological advancement was wedded with interconnectivity to allowed gamers to play multiplayer in real-time.

Consistent improvement led to continual revenue growth and welcomed millions of consumers into gaming while putting the industry on top in the entertainment industry as a whole.

Global video gaming revenue by type
Global video game revenues over the years.

Mr Pichai and the Internet’s most prominent gladiator, Google, unveiled what it called a “cloud gaming platform that pushes game development to new levels” led by its vice president and general manager (not to mention gaming industry guru) Phil Harrison.

Mr Harrison was a former corporate vice president of Microsoft and a representative director of Sony Computer Entertainment. In 2005, he unveiled Sony’s PlayStation 3 to a salivating audience of gamers at E3, the world’s premier gaming expo.

In the eyes of the world’s largest company, if there was a way to disrupt and evolve the gaming industry, Mr Harrison is the ideal spearhead given his illustrious career in game design, development and video game commerce.

Let the games begin

Google Stadia is a cloud gaming subscription service capable of streaming video games in 4K resolution at 60 frames per second to players on a worldwide scale via the company’s numerous data centres.

In essence, the service intends to allow players with even the most basic computer, tablet or phone, to play high-tech games that would previously require advanced hardware such as graphics cards, processors and a motherboard-full of RAM.

In a way, Google wants to do to games what it did to the Internet – to make them vastly cheaper and more accessible for the average user.

“Play where you want, when you want. Play on multiple devices: laptops, desktops, phones and tablets. No more updates and downloads,” according to Google, likely to be just the first course of market morsels brought forth at the unveiling of its revolutionary project.

However, as with all revolutions, there is a price that may have to be paid.

Status quo doesn’t like change

Critics of Google’s pet project have voiced concerns that game modifications will effectively be neutered, game ownership made redundant and possibly most worrying of all, it will allow Google to throttle the games industry into one giant pot overseen by one company.

One of the overarching concerns voiced by popular gaming hubs such as Kotaku, TechCrunch and GamesIndustry.biz is that Google has earned a reputation for dropping projects a bit like a bored child drops a brand-new instrument they received for Christmas.

Examples include Google+, Google Reader, and Google Health – exciting projects when first launched – all of which ended up on the scrapheap when Google realised there was little chance of defeating better-made industry variants.

According to GamesIndustry.biz editor Rob Fahey, “Google’s presentation was far heavier on telling us how great this will be for YouTube than it was on telling us what it’ll actually offer to game consumers or creators.”

“Thus far, Stadia remains essentially a tech demo with the actual service still merely a promise,” he wrote in an opinion column just days after Google Stadia was announced at the GDC in San Francisco last week.

Other technical concerns also include the issue of latency and lag.

How will Google ensure that high-resolution content is streamed consistently to gamers on a worldwide basis without hiccups and inherent advantages for players that are located closer to Google’s servers?

One answer could be relying on the impending spread of 5G networks – an entirely different enchilada with its own set of costs and benefits.

Those questions and more are on the lips of gamers. On the bright side, millions of “casual gamers” can look forward to being part of a community that doesn’t require expensive hardware, persistent upgrades or technical expertise. Millions of people just want to “plug’n’play” and don’t want to submerge their heads (or wallets) into becoming tech geeks just yet.

Movie buffs used to collect hundreds of VHS tapes and DVDs to include in their collections, and Google wants to vaporise this archaic practice by creating a service that offers gamers an entire catalogue of games for just one subscription – a bit like what Amazon and Netflix have done by offering their customers access to a vast catalogue of books and movies.

On Australian shores

In Australia, the impact of Google Stadia could be far-reaching.

Gaming market hopefuls such as Emerge Gaming (ASX: EM1), Mogul (ASX: ESH) and Animoca Brands (ASX: AB1) have all set out to offer a variety of services for gamers.

Google Stadia represents a seismic change which these small cap companies are well-placed to take in their stride.

Emerge Gaming

Emerge is focusing on cloud-gaming and recently cut the ribbon on its GameCloud technology in an attempt to become a first-mover in the game streaming space.

The timing was impeccable just days after Google unveiled its Stadia project with Emerge keen to capture significant cloud market share in parallel to Google.

The company said that Google Stadia “validates its initiative to execute a global distribution agreement with Cloudzen”, a leading cloud gaming and mobile entertainment platform.

The company’s chief executive officer Gregory Stevens added that “there has been a dramatic shift in the world of gaming, with the opportunity of cloud infrastructure. The applications are endless, from changing the way we play games online to running eSports competitions, e-commerce, advertising, and social engagement are all centralised through one application and create a truly unique in-game experience for the user.”

Mogul

Meanwhile, Mogul is focusing on a dovetailed market niche in the form of eSports which encompasses both casual and professional gamers, but also, offers access to the growing eSports market – a market niche that serves professional gaming to spectators that don’t necessarily want to play games themselves.

The company recently scaled its Mogul platform for use in the Silver Slam tournament in Asia and has also partnered with industry heavyweight Razer.

Animoca Brands

Animoca Brands is advancing a business model that is seeking to monetise the fastest-growing segment in gaming: mobile gaming.

The company is also seeking to develop blockchain based games.

According to industry analytics reporter Newzoo, mobile games constitute the most lucrative gaming segment, with smartphone and tablet gaming growing 19% year-on-year to US$46.1 billion (A$65 billion) and claiming around 42% of the market.

The analytics company estimates that by 2020, mobile gaming will represent more than half of the total games market and generate somewhere in the region of US$70 billion per year for game developers.

Google Stadia could potentially impact all three companies, especially if it goes on to become a hit with consumers.

Google Stadia launching 2019
Google Stadia is set to be launched later this year.

For now, Google has confirmed that Stadia is coming in 2019 to the US, Canada, UK and most of Europe, but pricing and a specific dates have yet to be determined.

So far, Google has only made an announcement and presented its aspirations for the future but turning its ambition into a reality will not only take a lot of effort and resolve, but also time. Whether or not Google Stadia is a market success remains to be seen.

Current industry royalty such as Microsoft’s Xbox, Sony’s PlayStation and Nintendo’s Switch will certainly be leading the dogfight against the most arduous existential threat the trio has ever faced.

George is an award-winning market analyst who has authored articles and editorial opinion pieces for multiple publications around the world. He has written about a wide variety of topics including financial markets, stocks, trading, politics and economics.