Interested in learning what's next for the gaming industry? Join gaming executives to discuss emerging parts of the industry this October at GamesBeat Summit Next. Register today.

At the Game Developers Conference 2019 this week, Google stole the show by announcing Stadia, its on-demand streaming service for video games. Set to launch later this year, Stadia promises to revolutionize gaming by streaming blockbuster games using any TV with Chromecast, computers running a Chrome browser, and any Android device — no console required.

While light on specific details, Google’s GDC presentation about Stadia was certainly impressive. Games like Assassin’s Creed: Odyssey will load within 5 seconds and run on any device, according to Google. Stadia’s high-end GPU pushes more than 10.7 teraflops — significantly more than Xbox One X and PS4 Pro.

Google execs also said that Stadia at launch will support 4K at 60 frames per second, with immediate future plans to upgrade the system at 8K resolution and 120 FPS. And while Google created a dedicated Stadia controller, existing third-party controllers players already own, or keyboards and mouse, will work just fine.

Stadia also may have cracked the latency problem. I was in the AC Odyssey Project Stream test last fall and, going into it, I couldn’t fathom how the controls would be anything but a laggy mess. I was pleasantly surprised to never have had any performance or lag issues over the 30-plus hours I played. Granted the test was limited to 1080p (which is much less demanding than their 4k plans), but it’s a very promising start.


GamesBeat Summit Next 2022

Join gaming leaders live this October 25-26 in San Francisco to examine the next big opportunities within the gaming industry.

Register Here

At Reach3 Insights, I help tech and gaming companies better understand the consumer landscape, and so I am very interested to see how — or if — Stadia will indeed transform the market. I have very little doubt that the launch of Stadia will be met with fanfare and hype, but it’s worth noting that Google is entering a very crowded general gaming market with a significantly different approach than many consumers, used to consoles and phones, might be used to. To maximize the impact of the Stadia launch, Google will need to make decisions that are aligned with the evolving preferences, attitudes and opinions of consumers.

The following three points, in particular, will be critical:

1. Get pricing right

In an interview with CNN Business, Google vice president and general manager Phil Harrison said the company intentionally pursued a “screen agnostic” strategy to deliver a service that doesn’t require players to pay for consoles. “We don’t want players to be spending hundreds of dollars, sometimes thousands of dollars, to create a gaming rig in their home,” he said.

So the question on everyone’s mind is this: How does Google plan to monetize Stadia? The safest bet is that the company will borrow a page from from the Netflix or Spotify playbook and charge a monthly subscription. Assuming the company’s taking this route, the next logical question is how much will it charge?

Getting pricing right is important for any company, but it is particularly critical for a potentially game-changing innovation like Stadia, which is really the first of its kind in this market. A very low price runs a couple risks. It could devalue full-blown games in the minds of consumers (much like what has happened in mobile gaming) or will communicate the wrong message about Stadia itself — that the service isn’t premium enough. Starting too low may also force the company to do yearly price hikes, which may, in turn, frustrate users. A super high price may deter a significant number of people from even trying the product, electing to continue their usual stream or console purchasing routine.

It’s important for Google to have that pricing conversation with potential customers early in the process to start honing in on the proper pricing strategy prior to launch, hopefully avoiding a need to course correct postlaunch. A proper conjoint analysis is frequently the most robust research solution in a situation like Stadia, where it’s a fairly new concept. This approach allows the product team to educate and tackle not only price but also which components and features to include in the offer. Gabor-Granger and Van Westendorp are of course also commonly used options, but the important thing is taking a data-driven approach to price.

2. Build the right partnerships

To make Stadia work, Google will have to ensure wide adoption with franchises that gamers already love. Without wide industry support, Stadia’s impact will be greatly diminished. Big players like Ubisoft and id are onboard, but will other blockbuster game companies follow to prevent an anemic game selection? It’s unclear what extra development efforts will be needed to make a game Stadia-compatible (not to mention how much of a cut Google will expect from sales), but it’s essential Google gets as many well-known games and developers on board as possible. Cross-platform games like Call of Duty, Monster Hunter, and FIFA, that typically see release across different consoles and PC, will need to have a presence on Stadia to legitimize it.

It’s too early to know how many game developers will sign on right off the bat and some may take a wait-and-see approach first, so Google will have to prioritize some partnerships. The company will have to really understand the early adopters in this market and learn which games and genres are absolute must-haves for them, but also be ready to build on those early adopters by having quality titles in other genres ready to go as Stadia ramps up.

3. Create compelling original titles

Exclusive games are an essential component of the business of gaming, and one that can have a huge effect on platform adoption. PlayStation’s fantastic track record with exclusives over the past years is a major part of how it earned such a large market share and player preference with the PS4. Similarly Nintendo’s unmatched first party games have kept it alive in lean times, and thriving over the past year with the Switch.

Knowing that, Google has established an in-house game-development studio that will create titles for Stadia. That’s a smart move as it helps future-proof the company’s growth. (Again, this strategy is from the Netflix playbook—the live-streaming company had to invest in its own content in order to avoid reliance on other companies.) Google seems committed to this endeavor by tapping Jade Raymond to head the new studio. Raymond has a strong pedigree, being best known for being the producer of Assassin’s Creed, which blossomed into one of the most successful franchises in the past decade. This suggests Stadia is committed to avoiding shovelware and instead intends to make high quality games.

That said, it’s not very easy to design hit games. For every Fortnite, there’s a Scalebound or Fallout 76. Creating an innovative, blockbuster hit requires more than just money and resources. Investing in insights to identify gaps in this crowded landscape and getting ongoing feedback on concepts and narratives from a large community of gamers could provide Google with the competitive edge it needs.

A potential game-changer

Overall Stadia sounds very compelling. Just the fact that players don’t need to deal with the hassle of upgrading their computers, consoles or devices should make Sony, Nintendo and Microsoft very nervous. It erases the largest barrier of entry to many people that may be interested in trying out some of these bigger games, but not enough to invest in a console or PC graphics card.

Just like many gaming enthusiasts, I’ll be watching the Stadia development very closely. Google definitely has the technical prowess to pull this off — as long as it keeps consumer needs in the forefront, Google likely has a game-changer here.

Sean Campbell is VP of tech and gaming at Reach3 Insights, a consultancy that leverages agile, on-demand and conversational technologies and techniques for market research. Together with Rival Technologies, Reach3 is part of the Reid Campbell Group.

GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Discover our Briefings.