Why Did Google Stadia Go Under?


Google Stadia, the company’s attempt at creating a cloud-based competitor to Xbox and PlayStation, will cease functioning in January. In the meantime, Google has impressed pretty much everyone by actually issuing refunds for the service, reimbursing gamers for all the hardware and software they purchased in the ill-fated Stadia ecosystem.

But why did the ambitious program fail? What made it struggle while Xbox and PlayStation had great sales performance throughout 2020 and 2021? The answer isn’t that complicated, really: People like owning things, and licensing those things instead isn’t as appealing to customers.

Buying Things You Don’t Own

Stadia’s business model didn’t make a ton of sense. Players were asked to buy a Google Chromecast and Stadia Controller if they wanted to play games on their living room TVs. However, they were able to access games with just a laptop or desktop computer and their preferred input method if they went through the Stadia browser app. 

That part was fine. The bizarre element of Stadia’s business model came in how players accessed the games. Google charged full retail prices for access to cloud-streaming versions of its titles. Despite paying $60 to play a game like Red Dead Redemption 2, players didn’t technically own the title. 

What Could Have Worked?

The business model that would have made more sense for Stadia is so painfully obvious that it’s baffling that Google never implemented it. Rather than having players pay full price to access cloud versions of games, the company should have offered Stadia as a subscription service, ideally with a price in the $10 per month range.

Then, after subscribing, players should have just had access to the entire Stadia library. Since they’re streaming the games from Google’s hardware instantaneously, this would have made Stadia the most affordable way for people to try out a large swath of games without owning any hardware of their own–aside from a screen and a controller.

The Internet Bottleneck

It’s also worth noting that the world was largely not ready for streaming-only gaming when Stadia was released. Many places in the US still don’t get internet service that is fast enough to handle streaming a AAA video game. That, alone, was enough to convince many gamers that spending $60 on a game they wouldn’t get to own was a bad idea.

And while Google did the right thing by refunding everyone, it’s a shame that the company wasn’t able to create an affordable, easy-to-access ecosystem for gamers. The future of gaming might look like Stadia one day, but Google likely won’t have much to do with it.