Why Google is shutting down Stadia and refunding gamers

The gaming industry has become a graveyard for many big tech companies that venture into it with big dreams of success, only to endure the nightmare of radical failure.

The latest victim is Google, which is shutting down its Stadia cloud gaming service and refunding players. This is why.

Google Stadia is shutting down

According to a message on The keywordStadia will be permanently discontinued on January 18, 2023 and all gamers will be refunded (details to be announced later):

A few years ago, we launched a consumer gaming service, Stadia. And while Stadia’s approach to streaming games for consumers is built on a strong technology foundation, it hasn’t gained the traction with users we expected, so we’ve made the tough decision to phase out our Stadia streaming service.

The Stadia platform and game servers will remain online until January 18, 2023:

Players will continue to have access to their games library and play until January 18, 2023, allowing them to complete the final play sessions. We will refund all Stadia hardware purchases made through the Google Store, and all game and add-on content purchases made through the Stadia Store. We expect the majority of repayments to be completed by mid-January 2023.

In addition, Google has disabled all commercial transactions in the game. However, most games just keep playing.

Gamers don’t have to return the refunded hardware, so this is a total loss for Google. Stadia Pro subscriptions are not eligible for a refund, but gamers are not required to pay any additional fees.

Why does Google kill Stadia?

While there are several reasons why cloud gaming shouldn’t go mainstream, there are specific reasons why Stadia failed.

1. The disastrous launch of Stadia

Google launched and marketed Stadia without key features like family sharing, support for wireless controllers on phones or PC, Buddy Pass, and Crowd Play. In other words, Stadia launched without the ability to play against or collaborate with family and friends.

First impressions are everything, especially in the gaming community. When word got out that Stadia was launching without these key features, gamers didn’t sign up.

2. Internet Disadvantages

Stadia required gamers to have an internet connection of at least 35 Mbps to get 4K resolution and 60FPS, or 10 Mbps for 720p and 60FPS. While it is true that this level of internet connection is accessible to many people, the harsh reality is that many gamers are not exactly swimming in the money.

For many, data limits on internet access prohibit unlimited streaming (cloud gaming takes a lot of data per hour). An Android gamer on a budget has a ton of Android games that don’t require internet at all, which should have given the Stadia crew something to think about.

Second, if your internet connection is unreliable, your gaming experience is unreliable. And if your device doesn’t support 4K, how good your game looks and feels is limited accordingly.

All in all, these drawbacks made Stadia uncompetitive against consoles and devices that host high-resolution games locally, severely limiting mass adoption.

3. Weak Games Library

Stadia launched without strong exclusive titles. The situation got worse when Google closed Stadia’s in-house first-party development studio and lost its top game development executives.

Stadia eventually relied on developers of third-party titles that nobody really cared about, and it continued to have a weak library throughout its short life. Blockbuster titles like Minecraft and Fortnite weren’t interested in Stadia because they were already available elsewhere. As a result, few gamers were drawn to Stadia.

4. Cost

Stadia charged gamers a subscription fee of $9.99 per month, or $99.99 per year, plus gamers had to buy games at full price. This made no sense to gamers, who would rather pay full price for a game that they will have on their console or PC forever.

In addition, streaming services such as PlayStation Plus or Xbox Game Pass offer much better value for money than Stadia, in addition to their much more developed ecosystems.

as the BBC comments:

What works for Xbox and PlayStation is hard to replicate when their customers have already taken advantage of consoles and subscriptions — and the companies behind them, Microsoft and Sony, have struck lucrative deals with the world’s largest game publishers.

Stadia never had a chance

According to Business Insider (content behind paywall), Google Stadia only had about 750,000 monthly active users in 2020, reportedly missing Google’s goal of 1 million monthly active users. This is really bad when you compare it to rivals like Xbox Live (statistic) and PlayStation Network (statistic), whose monthly active users had reached or exceeded 100 million by then.

Known for relentlessly killing failed products, Google must have quickly given up on catching up and pulling the plug. Stadia never had a chance.

Google’s failure won’t stop others

Google’s failure won’t stop others from trying. There is simply too much money to be made from gaming.

The latest big tech entrant is Netflix, which has established its own gaming studio in Finland. Will Netflix avoid the gaming graveyard that many of its great tech counterparts have claimed and achieve lasting success?

Time will tell.

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