Game platforms are two sided marketplaces that bring game developers and game players together. Stadia, a new game platform, will need to convince both sides that it’s worth the investment. For developers it’s a simple calculation of expected revenue vs the actual and opportunity cost of porting their game. For gamers it’s more complicated as a new platform means establishing a new “identity”, friends list, etc plus the actual cost of the hardware and games.
Traditionally game platforms have had the platform creator bootstrap one side of the marketplace through “first party” titles; Mario, Uncharted, Halo being the notable examples. This brings in an initial player base that then encourages more developers and you get a virtuous cycle. Mobile has succeeded without first-party game developers because the users were already there for the other apps.
This analysis will attempt to determine who will be the gaming audience for the Stadia and if that will count as success.
Before diving deeper into the analysis I’m going to establish certain types of games that currently exist, as most likely those will be the games that will also be on Stadia (at least for the first few years).
Casual
Slower paced, usually turn-based. Don’t require complex inputs. Can complete “a round” in a relatively short time (< 10 minutes). Dominated by puzzle games and strategy games.
Mid-core
Faster paced, and realtime gameplay. More sophisticated inputs. Requires a longer time investment (10-30 minutes) to get a meaningful experience. Examples: Minecraft, Roblox, kid-focused platformers. Most game playing kids (6-12 y/o) fall into this group.
Core
Even more fast paced and realtime gameplay. Even more sophisticated inputs. Similar time investments as mid-core. Examples: World of Warcraft, sports games and racing games.
Hardcore
Fast paced realtime gameplay where you have to be very skilled to have any kind of success. Very sophisticated inputs. Can sometimes require a significant time investment (60+ minutes). Examples: Fortnite, PUBG, Uncharted, League of Legends, Grand Theft Auto, Call of Duty, etc.
There’s a few things that game streaming provides that other platforms don’t have:
Will these things matter? It depends on the person of course, so I’ll go through the different personas, from most casual to most hardcore to see if they care about these things.
Defined as the person whose phone is their sole gaming device and only play casual games on their phone.
Probability Stadia can attract these people? Low.
Screen choice - Doesn’t matter. These people are fine playing on their phone, as they play while out and about, or if they play at home it’s while doing other things at the same time.
Easy game access - Doesn’t matter. Mobile games are relatively small, and casual gamers don’t play a lot of different games. They’ll find one and stick with it for a long time (months to years). So their game of choice is always available on their home screen.
Low barrier to entry - Doesn’t matter. They play games on their phone, which they already have, so Stadia doesn’t offer anything here.
Amazing graphics - Doesn’t matter. They play for the gameplay, not the graphics.
Different Business model - Doesn’t matter. Price of entry for these mobile games is already effectively free.
Defined as people aged 6-12 who are too old for simple iPad games, enjoy gaming, but more often aren’t sophisticated enough for core and hardcore games. Mostly play Minecraft and Fortnite (poorly).
Probability Stadia can attract these people? High.
Screen choice - Important. Kids have access to TV, laptops, phones and tablets and being able to flow between all of them with the same game and platform will be highly valued. Parents only having to buy “one” version of the game and not having to worry about where the kids will be able to play it will be nice.
Easy game access - May be important. Currently this group’s games are purchased by the parents. If there’s a monthly subscription option, and parents can easily specify the types of games that are allowed, then being able to easily jump into different games may be enticing to parents and kids. Right now I do think kids usually focus on a small number of games at a given time, so my current bet is that it won’t be important, but could easily be wrong here.
Low barrier to entry - Important. The low price makes buying a Stadia controller vs a PC/Switch/Xbox One a much more palatable option for parents.
Amazing graphics - Not important. Kids don’t care that much about graphics, but it’s good that the graphics are at least good.
Different business model - Important. Parents want to be able to provide games for their kids at the lowest price possible. So if the different business model makes Stadia the “lowest price” available for games, then that’s big.
These are adults that enjoy games, but don’t play them very much. They most likely had a Wii. They probably bought a PS4 or Xbox One (most likely a PS4) and played a few hardcore games like Call of Duty, but will go long stretches without playing anything on the console.
Probability Stadia can attract these people? Medium to high, dependent on the games available.
Screen choice - Somewhat Important. They’ll mostly play games on the TV, but it’ll be nice to have the option every once in a while to be able to play a game in bed on their laptop. Most of these people won’t play their games outside the home.
Easy game access - Important. If it’s easy and fast for them to try out the latest big release that will be a selling point for this crowd.
Low barrier to entry - Important. These people like games, but not that much. So being able to play the latest and greatest every once in a while for a low platform cost is a big selling point.
Amazing graphics - Somewhat Important. These are adults who enjoy technology and like being wow’d, but graphics aren’t the most important thing.
Different business model - Important. Similar to low barrier to entry, the ability to play a multitude of games at a low price will be very compelling. They don’t want to commit $60 for the next Call of Duty but it’d be nice to play it for a few hours for a low cost to see what the fuss is about.
These are people where gaming is one of their primary hobbies and will self identify as a “gamer”. They are very discerning on where they spend their gaming money and time.
Probability Stadia can attract these people? Low to High dependent on the cost, games available, the video quality and the latency.
Screen choice - Somewhat Important. They’ll mostly play games on their TV or PC, but again, it’ll be nice to have the option to play on their laptop, or at a friend’s Chromecast. The ability to play the same game outside the home will be compelling IF the quality of the experience is acceptable over mobile.
Easy game access - Somewhat Important. This group will usually have longer gaming sessions, so the initial startup time of 5 seconds vs 1 minute isn’t a big deal in a 2 hour session.
Low barrier to entry - Important. Gaming is a primary hobby for these people so the less they spend on hardware leaves more money for software.
Amazing graphics - Important. These are the people that drive the graphics and gaming industry forward. The key thing here is what the video quality is actually like with Stadia.
Different business model - Important. If they can play the same number of games for the same amount of time for a cheaper cost then that will be compelling.
People in developing countries that are Hardcore or Occasional gamers.
Probability Stadia can attract these people? High
Getting access to the latest and greatest for an affordable price will be incredibly compelling to people in emerging markets (South America, Russia, India, Middle East, Africa).
The industry will expand. This is a good thing.
I’m assuming that due to Stadia’s model it will be the cheapest way to play modern, high fidelity games. That is most enticing to kids and gamers in emerging markets even if the game library isn’t strong. If we look at PUBG mobile + Fortnite players that gives us a ballpark of audience size, which is somewhere in the 200M-300M range.
This initial audience will be large enough that Stadia will see a steady stream of B-tier games, which will keep kids + emerging market gamers satisfied. For Google this will be enough to make Stadia a financial success, but not enough to supplant and replace the traditional platforms (consoles + PC).
The industry will make more money as more developers will be able to easily tap into this larger market. This will then slowly entice the larger publishers to develop for Stadia, which will in turn bring in the occasional gamers (1-2 years post launch), and then eventually the hardcore gamers (2-3 years post launch).
Nintendo will lose customers, but not a threatening amount.
Sony will be threatened by losing emerging market gamers. This will be significant, but Sony will still be fine in NA, Europe and Japan.
Microsoft in the medium to long term has the most to worry about as their core base is most susceptible to move to Stadia.
Current PC gamers may move to Stadia but it will take time as they’ll wait for their current hardware to become obsolete before moving over.
Developers making kid games, or games for emerging markets should 100% aim to launch on Stadia as soon as they can.
Developers making core and hardcore games should wait 12-18 months post launch (unless Google provides an incentive) to make sure the porting effort is worth it.