It seems like just a week or two ago that I was eagerly watching NVIDIA (NVDA 4.00%) pilot its video-game streaming service into a market that is being poorly served by Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Stadia. In fact, it was just a week or two ago: NVIDIA's latest version of GeForce Now launched on Feb. 4, arriving just in time to take advantage of Stadia's ongoing stumbles and the dissatisfaction of its user base.
But a lot can change in a short time, and NVIDIA's new streaming service is already facing a big problem: a loss of support for games from Activision Blizzard (NASDAQ: ATVI), the company behind some of the biggest titles. Games like Call of Duty, Overwatch, and StarCraft are all missing from GeForce Now's lineup.
How did this happen? To understand, you need to know how NVIDIA's video-game streaming service works.
Video game fans are used to console and PC gaming where games are usually purchased once and then played on specific hardware: Xbox games for Microsoft's (NASDAQ: MSFT) Xbox, PlayStation games for Sony's (NYSE: SNE) PlayStation, and PC games on (of course) a PC.
To play on a different type of machine, customers usually have to purchase the game again. This model informed Stadia's cloud gaming economy, which requires customers to purchase games if they want to play them on Stadia.
The games-as-a-service model is changing expectations about buying copies of games (be they physical or digital), and some companies (including Activision Blizzard) have account systems that allow customers to link their game-play and game-save files across platforms. Still, the idea of having a separate copy or version of a game for each platform is the norm. Google's Stadia adheres to that norm.
NVIDIA's streaming platform comes at things from a different angle. It's a video-game streaming platform in the purest sense, focused on the streaming side of things rather than on the marketplace angle. If customers already own a game on PC, they can use GeForce Now to stream it without having to buy a new copy.
Or, more accurately, they can do this if the game supports GeForce Now. Not every game is compatible with NVIDIA's service, but a bunch are, including some top titles like Assassin's Creed: Odyssey and Fortnite. And huge titles from Activision offered support for GeForce Now, too, until they were all suddenly removed from the platform following what NVIDIA deemed a "misunderstanding" between the companies. NVIDIA said Activsion had asked to have its titles removed while an agreement to go past inclusion in the beta test was worked out.
The news has only gotten worse for NVIDIA since. Bethesda, maker of popular games like The Elder Scrolls: Skyrim and the Fallout series, has followed Activision's lead and pulled support for NVIDIA's fledgling platform.
What's the fuss?
It's not totally clear what the problem is between NVIDIA and the video game publishers, though it's almost certainly about money. On NVIDIA's blog, GeForce Now General Manager Phil Eisler said that, with GeForce Now, NVIDIA "connected gamers directly to game stores, so [video game publishers] maintain control of their content and we stay out of their economics."
But there's another side to that, which Eisler concedes in the same post: The publishers "maintain control over their content and decide whether the game you purchase includes streaming on GeForce Now."
This, along with the speed at which Activision and Bethesda games have disappeared from GeForce Now's list of supported games, seems to suggest that there's no contract underlying the relationship between GeForce Now and its games, and perhaps no money changing hands, either. Perhaps Activision and Bethesda are angling for contracts and money; or perhaps relationships with paid subscription streaming services like Sony's PlayStation Now or Microsoft's Xbox Game Pass are involved. For now, it's unclear.
In NVIDIA's relationships with Activision and Bethesda, we're seeing something relatively new: a sort of carriage dispute between a streaming platform and a video game company. It's the video game equivalent of a squabble between a family of TV networks and a cable or satellite provider.
And, as with carriage disputes, it's the customer who ends up suffering -- and growing more frustrated.
GeForce Now's most user-friendly feature suddenly looks a lot less appealing. There are obvious reasons for gamers to prefer streaming games they already own on GeForce Now rather than purchasing new copies on Stadia's marketplace. But when those games can suddenly be lost on GeForce Now, that undermines the whole point. Dedicated PC gamers may turn back to their desktop computer. But a streaming-only gamer -- a type whom tech companies with streaming video game ambitions must believe will become more common -- will be more than just frustrated.
To a gamer who prefers to stream games, Stadia's model could make more sense: According to Google, Stadia games will never disappear from the libraries of their purchasers, even if the games in question leave Stadia's marketplace.
Of course, Stadia has problems of its own. The point here is that NVIDIA could be taking advantage of those problems, and it's failing to do so.
NVIDIA is presumably well aware of the pros and cons of its model, but the timing of these incidents could not have been worse. With Stadia making all the wrong headlines and GeForce Now making its debut, the stage seemed set for a major coup in video game streaming by NVIDIA.
With positive reviews rolling in, NVIDIA looked golden, only to have this sudden twist turn yet another launch in video game streaming into a cautionary tale. Where NVIDIA goes from here remains to be seen. For now, the market for streaming video games remains wide open -- and as dangerous as ever.