Alphabet (NASDAQ:GOOG), (NASDAQ:GOOGL) launched its new gaming platform, Stadia, on Tuesday, and Google has set some lofty expectations for its first serious shot at video games. Stadia is a big bet on game streaming, as opposed to the more traditional setup of buying a console and using physical or downloadable software. Google has hyped features like Stream Connect, is an advanced new form of split-screen multiplayer; State Share, which lets you share save states with other players; and Crowd Play, which lets streamers share content right to YouTube while they're playing and allowing other players to join in.
However, rather than releasing a finished product, Google is launching Stadia without any of the aforementioned features, but says it will add them at an unspecified future date. It's treating Stadia like some of its other services, YouTube and Gmail, which are constantly being modified and updated with new features intended to improve the user experience.
If Google plays its cards right, it could usher in a new era of game streaming. Should established gaming giants like Microsoft (NASDAQ:MSFT) be worried? Here are some factors that might give them cause for concern.
1. Low cost of entry
With an MSRP of only $129.00, Stadia is more affordable than Microsoft's Xbox One S ($299.00), Sony's (NYSE:SNE) PlayStation 4 ($299.99), Nintendo's (OTC:NTDOY) Switch ($299.99), and even the cheaper Nintendo Switch Lite ($199.99). If you want to play recent games like Red Dead Redemption 2 and Mortal Kombat 11, but don't already have any of the mainline, current-generation game consoles or a decent gaming PC, Stadia is now the most affordable way to play those games.
Granted, users are required to pay $9.99 per month for a Stadia Pro subscription. The subscription provides up to 4K resolution, a 60 FPS frame rate, 5.1 surround sound, additional free games released on a regular basis, and special discounts exclusive to Stadia Pro subscribers. A free Stadia Base plan will be available next year, which downgrades you to up to 1080p resolution, stereo sound, no additional free games, and of course, no Stadia Pro discounts. (If you buy the Stadia Premier Edition -- which includes the Stadia controller and a Chromecast Ultra -- you get three free months of Stadia Pro included in the $129.00 MSRP.)
Whether or not to keep the Stadio Pro subscription after your three-month free trial expires depends on how important its perks are to you. If you're playing Stadia rather than a traditional console in order to save a few bucks, then you'll probably be better off switching to the Stadia Base plan when it becomes available in 2020. Since we don't know exactly when it's coming out, you might get stuck paying for a few months of Stadia Pro when all you want is the Base plan.
One could argue that you can get a better value on a similar subscription service from Stadia's rivals. For example, the Nintendo Switch Online service is only $19.99 for 12 months and includes online play, exclusive offers, a smartphone app that enhances online play with friends with a voice chat component, saving data in the cloud, and even access to classic NES and SNES games, with more titles being added regularly. The Switch might not have the technical muscle of Stadia (no 4K resolution) but its online service packs in a lot of fun at a great value.
2. Negative latency
One of Stadia's most ambitious claims is something called "negative latency." This is the platform's ability to predict what button the player is going to push and effectively "push" the button for them before the player can physically do so. This is made possible by a "buffer of predicted latency between the server and the player," according to Edge magazine. The game runs at such a fast frame rate that it's able to make those predictive moves. "Ultimately, we think, in a year or two, we'll have games that are running faster and feel more responsive in the cloud than they do locally, regardless of how powerful the local machine is," Stadia's vice president of engineering, Madj Bakar, told Edge.
If it works well, this proprietary technology could give Stadia a legitimate claim of being the fastest and most responsive gaming platform, no matter how much consoles beef up their specs. The idea of negative latency completely eliminating lag in video games certainly has a big appeal, and we're looking forward to seeing how it works in practice.
3. Streaming could gain traction
If streaming video games on TV catches on, then Stadia has a head start in the market. Sure, digital downloads have been around for a while, but streaming is a different animal. We're not talking about a buffet-style streaming service like Netflix; with Stadia, you still need to buy each individual game you want to play, at retail prices. But it's all cloud-based. Instead of downloading the game onto a console, the game is streamed to your screen instantly without you having to worry about load times or storage space.
While Stadia is the biggest bet on game streaming to date, Google isn't the only one doing it. Microsoft has Project xCloud, an experimental foray into game streaming being tested on a limited basis. Instead of, like Google, giving it a mass-market launch to anyone who wants to buy it, Microsoft is taking a more cautious approach with Project xCloud, making sure the kinks are worked out before launching it to the general public. This more careful approach could result in a more polished product than Stadia.
Sony is also trying its own version of streaming that is a bit more Netflix-like. PlayStation Now gives players access to hundreds of games for $9.99 per month, with price breaks kicking in for longer commitments ($24.99 for three months, $59.99 for 12 months). PlayStation Now has both a streaming and a downloading component, allowing gamers to go with whichever delivery method they prefer.
Will it take off?
There are plenty of Stadia naysayers out there, and to their credit, it's not hard to argue that Stadia in its current form is little more than a different delivery system for video games that serves as an affordable alternative to traditional consoles. Perhaps Google promised too much or launched too early, but time will tell if Stadia develops into everything its ambitious parent company dreamed it could be.
With Microsoft working on perfecting Project xCloud and with PlayStation Now already available, why should gamers choose Stadia? Some of Stadia's selling points are the unique features it's supposed to bring to the table that you can't get anywhere else, but since those features aren't available yet, gamers would be wise to wait and see what happens with Stadia before making it their new gaming platform of choice. No matter what happens, it gives investors something new to pay attention to when looking at companies that have their hat in the gaming ring.