NVIDIA (NASDAQ:NVDA) recently ended a three-year public beta test for its cloud gaming platform GeForce NOW and formally launched the service for PCs, Macs, Android devices, and SHIELD devices. NVIDIA hosts the games on servers with its high-end RTX GPUs, and offers it in free and premium tiers.
The free tier offers an unlimited number of one-hour play sessions. After the session expires, gamers need to queue up and wait for the next available session. The paid "Founders" tier costs $4.99 per month and offers on-demand streaming without wait times or time limits. The first three months are free.
NVIDIA claims that over 300,000 beta testers streamed more than 70 million hours of gameplay in 30 countries in North America and Europe over the past three years. It also noted that 80% of players "instantly upgraded from systems without GeForce GPUs to the latest PC graphics" via its cloud service.
At first glance, GeForce NOW might just seem like another competitor for Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) Google Stadia, which struggled with with tech issues, a dearth of compelling games, and a confusing business model after its launch last November. But if we take a closer look at GeForce NOW, we'll realize that this new service could spell doom for Google's nascent gaming service.
NVIDIA targets Google's biggest weaknesses
When Google announced Stadia last year, many gamers expected it to mimic Netflix by offering unlimited access to a library of games for a monthly fee.
Yet Google doused those hopes and revealed that Stadia was merely a cloud-based locker for purchased games. To play games on Stadia, gamers need to purchase games from its store -- even if they previously bought the game from other digital storefronts like Valve's Steam, Ubisoft's Uplay, and Electronic Arts' Origin.
NVIDIA's GeForce Now, however, links with all those major DRM platforms and allows players to stream the games they already own without an additional purchase.
NVIDIA is already letting users stream their own games on the free tier now, while Google currently only offers its paid "Pro" tier for $9.99 per month. In a recent interview with Protocol, Google executive Phil Harrison declared that Stadia's free tier would launch "within the next few months."
GeForce NOW also offers over 30 free-to-play games for both tiers, as well as support for "hundreds" of purchased titles from over 50 publishers.
Stadia Pro launched with 22 games and currently supports just over 40 titles, but each game needs to be purchased. Google lets Pro subscribers play five of its games without an additional purchase, but its upcoming free tier won't offer any access to those free-to-play titles.
In short, GeForce NOW's business model is more straightforward and appealing than Stadia's. Gamers can test out the service for free with free-to-play games or games they already own, then upgrade if they want to play those games for extended sessions. It also costs half as much as Stadia's service and runs more games.
GeForce NOW will weaken Stadia, xCloud could kill it
NVIDIA tested out GeForce NOW for three years before its formal launch, but Google only seemed to test Stadia -- formerly known as "Project Stream" -- for about a year before launching the paid version.
Google's initial vision of Stadia, which teased deep integration with YouTube and the ability to join a live-streamed game, has yet to materialize. Its sporadic updates about the platform, the slow trickle of exclusive titles, and the lack of enthusiasm from publishers -- which seemed eager to support GeForce NOW -- all indicate that Stadia was a half-baked project.
To make matters worse, Microsoft (NASDAQ:MSFT) plans to launch its own cloud gaming platform, xCloud, later this year. It will likely bundle xCloud with its Xbox Live and Game Pass subscription services, which could gain plenty of gamers as it launches the Xbox Series X over the holidays. Simply put, NVIDIA could weaken Stadia with GeForce NOW, and Microsoft's xCloud could pull away even more gamers.
Would Stadia's decline hurt Google?
Google still generates most of its revenue from ads, so Stadia's success or failure won't impact its near-term growth. But if Stadia fails, it will mark a missed opportunity for Google to leverage YouTube, Chromecast, and its Google Play gaming ecosystem to create a next-gen gaming platform that isn't tethered to a single hardware device.
Meanwhile, NVIDIA seems to clearly understand what publishers and gamers want from a cloud gaming service. It's still too early to tell if it will succeed, but I suspect that it will steal Stadia's thunder over the next few months.