Google Stadia as an example of the failure of corporate policy from Google

Hello.

In 2019, Google decided that they could compete with NVIDIA and launched their cloud gaming service, Stadia. The history of Stadia is a great example of how large corporations can compete and then just “forget” about their failures. This is a good illustration of the modern market, when raw products are brought to it, something that needs to be improved behind the closed doors of companies. Using the example of Stadia, we will try to figure out together what exactly went wrong and why. A classic situation of ignoring reality and hoping that everything will work out by itself.

The pioneer of cloud gaming is NVIDIA, which has made a name for itself on graphics accelerators that are used in video cards, supercomputers and other areas. For NVIDIA, the cloud gaming service was a logical diversification of the company’s skills – developers adapted their games for NVIDIA hardware, the company had and still has close ties with developers, which allows cooperation with them on a fundamentally different level than most companies have. I always liked the fact that NVIDIA tries to measure it seven times, and only then decide to launch this or that product, which does not guarantee that it will not fail (remember NVIDIA Tegra, mobile processors did not take off for various reasons).

In 2013, the company began to explore the possibilities of cloud gaming, which is when the first generation of Shield appeared. The stake was placed on the fact that the library of games is located on the company’s servers, the subscription allowed them to be played, no purchase was required. The service was in beta status for several years, as the possibilities of interaction between users, game developers and the model that could be economically justified were studied. Unlike the classical model, in which a person buys a game, here it was necessary to calculate the cost of server maintenance, how a subscription might work, and test hypotheses in practice.

By 2015, the name GeForce NOW appeared, the concept of the service had changed slightly, only a couple of years later, clients for Windows and MacOS appeared that allowed you to run games from the NVIDIA cloud. The concept was formed – BYOG (bring your own game), you needed to buy a game, enter your data into it. But no download of the distribution kit to your computer, everything was launched from the cloud. At the same time, the GeForce Now service remained in beta status, the company was not ready to make it paid. There were many reasons for this, for example, progress was not saved in games, there were no statistics on the quality of the connection (and this is the main problem, and solutions were needed).

The library of games grew gradually, if at the beginning it was a few dozen games, then in 2022 there are more than a thousand of them. I note that cloud services require not only testing games, but also adapting them to the technical characteristics of each service, this is not so easy.

In total, prior to the launch of GeForce NOW, NVIDIA had been building bricks for the future service for ten years, gaining experience and doing exactly the same in the beta version. These are billions of man-hours spent on launching the service, although it is impossible to meticulously calculate the real investment in the service. Indirectly, we can estimate the amount of time spent in the service from the first days of beta to commercial operation. This time allows you to understand how many problems appeared, how successfully they were solved.

What could Google have done and what didn’t they do when Stadia launched? Why did everything go wrong?

The curse of big corporations – unlimited resources, self-confidence and prospects

What does the decision to enter a particular market segment look like for large corporations? Analysts are constantly looking for new market niches, studying what is happening in the market, where there are always “hot” topics. One of those topics was, of course, cloud gaming, with research firms forecasting that the growth would be staggering. Google wanted to be present in this market, to bite off a piece of it.

What is taken into account in such a decision? Let’s list some key considerations:

  • Google has a huge audience, the cost of customer acquisition is lower than for other companies due to loyalty and internal marketing tools;
  • The company’s data centers are located in different countries of the world, the cost of expanding their capabilities for cloud gaming is negligible;
  • A large staff of developers, you can quickly implement a new platform;
  • Integration with popular products from Google – Chrome browser or YouTube;
  • Virtually unlimited resources, the ability to squeeze out competitors at the expense of development and marketing budgets.

The negative factors are:

  • Lack of expertise in this area;
  • The need to compete with a strong player, build a pricing policy for him;
  • High level of investment at the initial stage.

Agree that there are much more pluses and there is a feeling of ease of developing a new service. Little things that can stop development are not taken into account. This is how Google Stadia was launched, when the enthusiasm of Google employees erased all obstacles, the company began developing its service. The start of the service dates back to 2018, when the GeForce NOW parameters were known and this service became a blueprint for Google’s own developments.

In 2019, the name Stadia appears, Google has been promoting a beta version since the end of 2018, beta testers are offered one game – Assassin’s Creed Odyssey. And here we stumble upon the first problem – the lack of a large number of games, as a result, all possible problems simply did not come out as part of the beta test. But the amount that was enough for the eyes. Formally, Google gave a short time for the beta test, the commercial launch took place on November 19, 2019. The rush was associated with the release of GeForce Now, the development of the service.

Let’s fix the first problem – Google has reduced the beta testing time as much as possible, limited the number of games and, as a result, possible errors. An artificial limitation that plays in favor of Google, but does not reflect the real world at all. You can count the existence of GeForce Now from different time points, but the fact is that NVIDIA spent at least five times more time developing and bringing the service to perfection (and a larger staff worked on it!). Unfortunately, I have no way to directly compare the number of man-hours spent, but I’m sure that the difference there will be orders of magnitude and in favor of NVIDIA.

The love for Google in the US is great, the company focused on this market. The launch of the service also extended to 13 other countries where Google’s capabilities were at their highest. And this is where the first conflict arises within Google.

Marketing requires maximum efficiency, attracting the largest number of users. But if you don’t have a product ready, it will backfire. There must be a person within the company who can influence the decision-making process, for example, the first persons in the management chain. Marketing was not subordinated to Stadia, but most importantly, the development constantly reported that, although there were problems, they were minor and solvable. The service, according to the developers, looked no worse than that of competitors.

And this is a direct manipulation of information, since you can find a lot of negative reviews, consider them important for a competitor, but insignificant for yourself. A very beautiful picture is drawn on paper, you have a good product. In reality, of course, this is not the case.

After the launch of Stadia, the number of negative reviews was prohibitively high – problems with the picture, unstable work of games and the list goes on. The service is raw. These problems were not quickly corrected. The mistake is precisely in the absence of an audit by Google’s management, in the fact that many statements were taken for granted (which is the norm at Google).

In parallel, Google solved the problem with the number of games, decided to create a division that would develop them and adapt games from other companies. The decision, to put it mildly, is surprising – after all, it instantly became clear that its own studio would compete with external developers and receive preferences. And this is a conflict of interest that was built into the structure itself. Very quickly, Google closed this division when they realized the amount of investment and looked at the outflow of customers from the platform. The economy did not develop in any way, but the problem was at the level of ideas. The Stadia Games and Entertainment division appeared in March 2019, closed in February 2021. Moreover, exactly the same approaches are applicable to this division as to Stadia as a whole, this is the corporate culture of Google, which multiplies projects with incorrect initial data, something that cannot take off even in principle.

The problem with Stadia is that as soon as the number of games began to grow, so did the number of flaws, they buried the service. No new games, small library and poor user experience. The company decided not to spend money on exclusive games, which is logical – why attract people at your own expense who will be disappointed in the service?

Google announced that they are closing Stadia from January 2023, users will be refunded money for purchased joysticks and a subscription.

But what is significant here is that Google did not inform partners about the closure, about how it plans to pay for the work on porting games for Stadia, which had been going on up to that time. Another example of how in a big company they simply forget about their obligations and do not think over the business and their steps in it.

It often seems to us that large corporations have some special properties – they have a crystal ball in which they see the future. That such companies work much more accurately and better than anyone else. In fact, everything is completely different – companies often launch products that even potentially cannot take place, there are no prerequisites for this. But the name of the companies attracts users, they are convinced at their own expense that the miracle did not happen. Even ashore, you can assess the potential of any company, for this you just need to figure out what resources it has, what experience it has in this area, how quickly it can learn something and who competes with it. My negative attitude towards Stadia was based, among other things, on the knowledge of specific people who were involved in the project – they could not succeed in principle. Which is what happened in the end. It is possible to take on this or that segment of the market in an impudent manner when you have unlimited resources and experience behind you. Money in itself does not solve anything in such matters, and this should always be remembered.


Source: Mobile-review.com — Все о мобильной технике и технологиях by mobile-review.com.

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