Stadia promises a paradigm shift for the gaming industry, which has already in recent years seen huge incursions by smart phone games like Candy Crush.
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Google’s assault on the console gaming incumbents may resemble what Amazon.com Inc (NASDAQ:AMZN) has done to bookstores, the impact that Tinder has had on ladies night at the local discotheque, or Tesla Inc’s (NASDAQ:TSLA) threat to gas-guzzlers.
If Tesla is successful, and wider mainstream adoption follows, Elon Musk’s company will lead the most dramatic redefining of the automobile industry since Henry Ford started rolling Model Ts off the production line.
But, to draw an analogy, what Google is about to do in the computer games industry would be like Tesla replacing motor cars with teleportation.
Google’s Stadia would, in theory, make Microsoft’s Xbox and Sony’s Playstation machines obsolete and – control pads and VR headsets aside - it would essentially make the gaming industry entirely about software.
In its own words, with its primary ad slogan for the platform, Google says “the future of gaming is not a box”.
Redefining the economic landscape
Cloud-based gaming would be available anywhere that there is a Google connection to a screened device – whether that’s a PC, tablet, mobile phone, smartTV or to regular TVs via chromecast.
Significantly, for the gaming industry this will, in theory, redefine the economic landscape for consumers.
No longer would gamers (and parents) have to fork out hundreds of pounds for consoles before a single game is even bought.
It would, in theory, mean that more disposable cash could instead be spent on games - potentially putting that money into the pockets of the blockbuster game studios like Activision Blizzard Inc (NASDAQ:ATVI), Electronic Arts Inc (NASDAQ:EA), and Take-Two Interactive Software (NASDAQ:TTWO).
For investors in London, that could potentially also mean more opportunity for video game services firm Keywords Studios PLC (LON:KWS) – the Dublin-headquartered group is a key contractor to the large studios and distributors, for services such as localisation, testing, audio and art production, as well as live customer support operations.
Stadia would also completely remove the need for physical media. Yes, games are easily downloaded across Xbox, Playstation and Nintendo Switch consoles, but, nonetheless, consumers and retailer have persisted with physical storage versions.
For smaller independent developers it could potentially break down barriers of entry to the mainstream market for games.
It possibly also delivers a final death-knell for business models of high street video game retailers like Game Digital PLC (LON:GMD) in the UK or GameStop Corp. (NYSE:GME) in the US, albeit those stores are now increasingly for the sale of associated merchandise and collectibles rather than either gaming hardware or software.
For Google, it is a power move that aims to deeply monetise the vast community of people already watching other gamers play games.
“In a world where there are more than 200 million people watching game-related content daily on YouTube, Stadia makes many of those games playable with the press of a button,” Google said in a statement.
“If you watch one of your favorite creators playing Assassin's Creed Odyssey, simply click the “play now” button. Seconds later, you’ll be running around ancient Greece in your own game/on your own adventure—no downloads, no updates, no patches and no installs.”