Google 'Stadia' Folded, but the 'Cloud Gaming' War Expands...

Big Techs Targeting 'Game Board Netflix' in the Cloud
Intense Competition for Content Acquisition through M&A by MS, Sony, and Others

[Asia Economy Reporter Yuri Choi] Google, which aimed to become the "Netflix of gaming" with its cloud gaming service 'Stadia,' has decided to discontinue the service. Market analysts say this is merely a "failure of Google," but the growth potential of cloud gaming remains intact. The explanation is that big tech companies are fiercely competing because users can enjoy high-spec PC or console games on mobile devices without downloading games, simply by accessing the platform.

Google Discontinues Stadia Three Years After Launch

According to the IT industry on the 3rd, Phil Harrison, Vice President of Google, recently stated on a blog, "We have made the difficult decision to discontinue the Stadia streaming service," adding, "We were unable to attract as many users as we had hoped."

Stadia is a cloud gaming service launched by Google in March 2019. It garnered attention as users could enjoy games with just an internet connection, but it faced criticism for having a limited game lineup and slow operation speeds. Last year, there were speculations that Google’s dismantling of its own game development studio hinted at the possibility of service discontinuation. However, the service shutdown has become a reality three years after its launch.

Google plans to completely shut down Stadia servers in January next year. Until then, refunds will be processed for Stadia-related content purchased from the Google Store. Users will only be able to access their libraries or play games until the server shutdown.

Cloud Gaming: The Biggest Battleground for Big Tech

Unlike Stadia, which is closing its service, the growth potential of the cloud gaming market is considered undeniable. Google simply failed to satisfy users in terms of content and service quality, but the cloud gaming market remains one of the biggest battlegrounds for big tech companies.

Microsoft’s 'Xbox Game Pass' and Amazon’s 'Luna' are competing as subscription-based cloud gaming services. Sony’s 'PlayStation Now' and Nvidia’s 'GeForce Now' have also entered the cloud gaming market to dominate the next-generation game distribution network.

In particular, Microsoft and Sony are aggressively investing in game content to attract users. Microsoft has expanded its content portfolio not only through its own lineup introduced via Xbox but also through mergers and acquisitions (M&A). Especially, the 'mega deal' earlier this year to acquire the American game company Activision Blizzard for 68.7 billion KRW (approximately 8.2 trillion KRW) secured popular games such as 'Call of Duty,' 'Diablo,' 'StarCraft,' and 'Overwatch.' As a result, the number of Game Pass subscribers increased from 10 million in 2020 to 25 million. Currently, Microsoft holds a 60% share of the cloud gaming market.

Sony has responded in kind. In May, it launched 'PlayStation Plus,' which integrates and expands its existing subscription and streaming services. For a monthly subscription fee of about 10,000 KRW, users can enjoy over 600 games. Having secured many of its own famous intellectual properties (IPs), including 'Destiny' from Bungie Studio acquired earlier this year, Sony is considered to have sufficient competitiveness.

Expanding Ecosystem via TV... Leading Game Growth

The cloud gaming market is expected to grow even larger. Users who want to enjoy high-spec games online without upgrading their PCs or purchasing expensive consoles are turning their attention to cloud gaming.

The ecosystem is expanding beyond PCs and mobile devices. Some LG smart TVs released last year began supporting GeForce Now, and Samsung offers cloud gaming services such as Xbox Game Pass on its latest smart TV models released this year.

According to global market research firm Newzoo, the cloud gaming market is projected to grow rapidly from $1.4 billion (approximately 2 trillion KRW) in 2021 to $5.1 billion (approximately 7 trillion KRW) in 2023, and $6.3 billion (approximately 9 trillion KRW) in 2024. An industry insider predicted, "As growth slows in existing PC and mobile platforms within the global gaming market, cloud gaming, which enables cross-play across platforms and has no device restrictions, will lead growth."