Google made a big leap into interactive entertainment Tuesday, announcing an online video gaming platform that it said represents the future of play.
The streaming games service, called Stadia, will enable users to run video games on sophisticated hardware maintained remotely by Google and directly control the action from their own devices over an Internet connection. Google’s approach closely mirrors that of Netflix Inc. and on-demand video, a model that has since spread to e-books, music and live television. And it differs from existing platforms such as Valve’s Steam, which require users to download and install a game before it can be played.
At an industry conference in San Francisco, Google also debuted a console-style game controller designed to communicate with the new games service, which is built on top of the Google Chrome browser and runs from Google data centers around the world.
Both moves underscore the stakes for Google and other tech companies as they seek to stay dominant in an endless battle for consumers’ attention and behavioral data. Now the company is seeking to combine its advantages in software, networking and cloud computing to develop an entirely new product.
“When we launched Chrome a decade ago, we imagined it could be a modern platform for web applications,” said Google Chief Executive Sundar Pichai, “including use cases that seemed impossible at that time, like high-quality games.”
Google has a hefty presence in gaming through its Android app store, one of the most popular marketplaces for mobile games. But the search giant and peers such as Amazon.com Inc., Facebook Inc. and Apple Inc. have a less central role in the lucrative hardcore gaming market, which still runs on hardware such as Sony Corp.’s PS4 and Microsoft Corp.’s XBox and has spawned a huge esports entertainment industry.
With Stadia, Google is aiming to bring more complex games to more people.
But Google faces other rising competitors in the space, including Microsoft’s Project xCloud, a similar streaming service. News reports have also suggested that Apple, Amazon.com Inc. and Verizon Communications Inc. may be thinking about pushing into cloud gaming themselves. (Amazon Chief Executive Jeff Bezos also owns the Washington Post.)
Meanwhile, companies such as “Fortnite” publisher Epic Games have introduced their own game marketplaces and app launchers, which could compete with Google. And Sprint Corp. recently said it is partnering with the cloud gaming firm Hatch Entertainment as part of its launch of 5G wireless services. Proponents say 5G mobile data will be more reliable than 4G LTE and will someday be able to support download speeds of 1,000 megabits per second — capabilities that could be ideal for cloud gaming.
To help cement its place in the gaming industry, Google said Tuesday that it is founding its own, proprietary game development studio, Stadia Games and Entertainment.
The main Stadia service, which Google said will launch this year, is also a recognition of YouTube’s growing prominence as a destination for gamers: Many record themselves playing games — streaming live on services such as Amazon’s Twitch, which dominates this niche, as countless viewers tune in — and later upload those videos to YouTube so additional viewers can watch. Google’s Stadia controller includes a dedicated button to share captured video game footage straight to YouTube, and the service will support simultaneous YouTube streaming of in-game activities, executives said. That might entice gamers away from Twitch.
Google declined to say how much it will charge Stadia users or whether the service will be funded through advertising like most of the company’s other businesses.
That raised some eyebrows. “What’s the revenue model?” said Joost van Dreunen, co-founder of gaming research firm SuperData. “It’s a little bit like saying we’re going to start a restaurant but we have no idea what cuisine we’re making.”
Google’s emphasis on cloud gaming highlights the convergence of numerous trends — such as fast, low-latency broadband and the declining cost of computer processing, particularly at scale — that together could turn more people into gamers at all hours of the day, even if they lack the powerful computing tools needed to run the most advanced games.
In a demonstration of Stadia, Google said players will be able to watch a game trailer on YouTube, then click a button on the site to launch that game from Chrome — a process that should take as little as five seconds, according to Phil Harrison, a Google vice president and former console executive at Microsoft and Sony.
Harrison repeatedly said the goal was to reduce or eliminate the “friction” that stands between players and their games, such as having to wait for downloads or access to more powerful equipment.
Because games on Stadia operate from a Google server, Harrison said, players will be able to move from one internet-connected device to another without interrupting their game session. The demo showed a Google employee, in the middle of a game of “Assassin’s Creed: Odyssey,” switching from a Chromebook to a smartphone to a tablet, then to a PC and finally to a television.
The service is expected to display video at 4K resolution and 60 frames per second, said Google — features that are quickly becoming table stakes in the rapidly evolving world of video games.
Google’s announcement represents the splashiest entry into cloud gaming yet, following a public beta last fall that allowed testers to try out “Assassin’s Creed: Odyssey” from a Chrome browser.
But some are skeptical that Google and other tech firms can build a sustainable business around cloud gaming. Most gamers who play premium games and who would likely be the target audience for such a service already have access to powerful gaming hardware, analysts say. And Google’s move into the distribution of games could lead to new tensions with game publishers, said Brandon Ross, an industry analyst at BTIG.
“We believe third-party publishers would be reluctant to empower distributors the way media companies empowered Netflix by allowing them to include frontline product,” Ross wrote in a recent research note.
Game developer stocks moved on the unveiling of Stadia. Activision Blizzard Inc. climbed 3.2%. Take-Two Interactive Software Inc. rose 2.1%. Electronic Arts Inc. fell 2.2%. A spokesman for Take-Two declined to comment, and representatives for the other developers did not immediately return requests for comment.
Google announced a partnership with chipmaker Advanced Micro Devices Inc. to help power the service. AMD shares leaped 11.8%.
Shares of Google parent Alphabet Inc. rose 1.2%.
Bloomberg contributed to this report.