1 Reason Google Wants in on the Gaming Space

Last week, The Wall Street Journal reported that Google (NASDAQ: GOOGL  ) will enter the gaming console fray as early as this fall -- but maybe not for the reasons you may think.

Google isn't looking to take on Microsoft (NASDAQ: MSFT  ) or Sony's dominance in the space. Both companies have sold about 70 million units each of their latest consoles, and they're firmly planted within the gaming market with both their fan base and game makers. Google's angle would be to create an inexpensive console for playing Android games, rather than an expensive box for top-tier gaming.

It's not a revolutionary idea, but it's a good one. The daily revenue from the top 200 grossing apps in the Google Play store is $1.1 million. Obviously not all of those are games, but the majority of them are.

But it's likely that Google's entering the gaming space because it's afraid Apple (NASDAQ: AAPL  ) is moving in that direction, too. Apple released some specs on a gamepad controller just last month, proving Apple TV is one step closer to becoming a gaming console. The new game controller standard would bring all of Apple's game developers onto the same page and create a unified gaming experience for its customers.

Back in February, MacRumors mentioned that one of the first engineers to work on the original Xbox posted this on his blog:

Why can't I write a game for Xbox tomorrow using $100 worth of tools and my existing Windows laptop and test it on my home xBox or at my friends' houses? Why can't I then distribute it digitally in a decent online store, give up a 30% cut and strike it rich if it's a great game, like I can for Android, for iPhone, or for iPad?

When you put it that way, it seems like a no-brainer for Apple and Google to release console-like gaming.

The rumored Google device will be designed and marketed by Google, which would give the company Apple-like control over the device. Google has opted to hand over Android to OEM vendors in the past, but a 100% Google console would likely receive far more attention than releasing the device through another company.

A Google console could bring in obvious revenue from app sales, but it would also bring Android one step further into the home market. So far, Android has been incorporated into a few home devices, but a Google console is the most logical progression, since games are already a popular part of the OS. Going forward, investors and consumers need to keep an eye out for how both Apple and Google approach in-home gaming, as it's a new area for both of them -- and one with lots of future potential.

When it comes to competition, Google and Apple are fighting tooth and nail in the mobile and home space. But there are still three other companies defining the tech world as well. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.


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  • Report this Comment On July 01, 2013, at 10:48 PM, aza400 wrote:

    Finally an interesting well thought out article.

  • Report this Comment On July 01, 2013, at 10:51 PM, marv08 wrote:

    I may not be representative here, as I am not a big gamer, but I am not really getting it...

    If I have a game on my tablet, it is covering the same part or even more of my field of vision than if I run it on a TV 15 feet away. If I can't run more powerful and/or multi-player games on it... what is it good for? After years on the market with Android for tablets, Google does still not have any dedicated tablet apps worth mentioning (it's 99% scaled up phone apps wasting the screen). Where will TV and controller optimised games come from? And why would a game developer give away a console game for 99 cents, or even ad-supported (i.e. for nothing)?

    If this is even true, I consider it just one more case of the Google "we have to be everywhere" syndrome. After two failed attempts to bring anything onto the TV (if Apple would have announced and canceled the Nexus Q the way Google did, the stock would be at $5) and almost killing Logitech as a bonus... they need a new toy to spend their ad revenues on. They will eliminate some talented and serious competitors and then cancel their product when everything has been destroyed.

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