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6 February 2020

Verizon bundling deal will not make up for Google Stadia’s content deficit

Google, like all Big Tech, is on the offensive in multiple areas of the gaming market, but two new partnerships for its Stadia ‘cloud console’ offering will not turn that into a game-changer. Google has forged new gaming partnerships with Activision Blizzard and Verizon, but while these will bring big benefits for Google Cloud and YouTube, Stadia is chasing bundling deals rather than beefing up its content, which is potentially a fatal move.

Activision Blizzard has chosen Google Cloud and YouTube for its cloud hosting and streaming services, respectively. This is a big win for Google in two rapidly expanding markets – Activision Blizzard has monthly active users (MAUs) in the hundreds of millions and total revenues of $7.5bn in 2018. Google Cloud boasts 134 network edge locations, operating in over 200 countries and territories. The service allows game developers to run backend services on-premises, on Google Cloud, or on multicloud. Google Cloud supports developers such as BlueStacks, Gamesys and Ubisoft.

However, Stadia is not making the same headway. It is being bundled into the top tier of Verizon’s FIoS broadband offering, but that is unlikely to convince hardcore gamers to change their set-up. Launched just months ago, Stadia needs its own content, and the painfully slow rate at which new games are coming onstream is hitting the service.

Verizon customers who purchase the top-tier gigabit FIoS plan will receive a Stadia Premiere Edition package and a three-month subscription to Stadia Pro, after which the standard charge of $9.99 will be imposed. This suggests Verizon’s confused strategy of simultaneously bundling and unbundling services is set to continue. There has been recent unbundling of video and broadband services but at the same time, FIoS is tying itself to streaming services such as YouTube TV, Disney+, and now Stadia.

For Stadia, tying itself to premium broadband packages is not going to bring in huge numbers of customers. That needs plenty of good content, but Stadia’s website currently lists just over 40 games titles, barely up from the 31 games that were unveiled in March as part of the Stadia Pro service.

Stadia was publicly released in November, but this slow start is simply not strong enough in a market that is notoriously impenetrable. As it stands, the range of games on offer is nowhere near diverse enough to entice a serious gamer into ditching their beloved console for a cloud-based service. Google has announced that 120 games will be released onto Stadia over the course of this year, with 10 timed exclusives due by July.

Describing Stadia as the Netflix of gaming was a fundamental mistake in its roll-out. The platform was much more like a traditional console experience than it was tipped to be during early development, and it did not seem equipped to throw the gaming market into disarray. In July, a GameTrack survey suggesting that serious gamers were not ready to embrace streaming. Only 3% of serious gamers declared themselves very interested in playing via a Netflix-style streaming service instead of via a dedicated console or PC, while 70% had little interest at all.

Stadia follows in the footsteps of Sony’s OnLive, plus PlayStation Now and Gaikai, while Microsoft has also had a crack at the nut with a project coined xCloud. These are all cloud gaming platforms which ultimately saw lower than expected uptake.