He's not alone. I raised the possibility last week, spelling out my argument for Google working on a Gbox entry as yet another way to be a thorn in Microsoft's
"Gaming is no longer about stand-alone consoles," I wrote at the time. "Everyone is connected. Games are being delivered digitally. Relevant in-game ads are being served on the fly. It's on that last point that Google has a distinct advantage as the world's leader in selling online advertising."
Every game has its end
The rub, of course, is that Google isn't about to undertake a major investment in butting heads with three established console makers. The easiest way in would be to get its feet wet through online gaming. Some of China's biggest portals, like Sohu.com
Why not Google?
That is easier said than dot-com done, though. The learning curve may not seem steep, but Google has been a reluctant pupil. Lively may have turned heads with its launch two months ago, but there is little reason to believe that it will be a major player in the avatar-driven graphical social community space.
Taking on the casual games market, as Electronic Arts
Unfortunately for Google, hospitality isn't its strong suit. You're unlikely to see housewives converge virtually for a game of bridge on the company's online doorstep anytime soon. The company earns its keep by shooing people away. It doesn't want to be rude, but it realizes that there is more money to be made by sending off visitors to paying advertisers than by letting them crash on its sofa all night.
There is no joy in serving up a ton of pages if they can't be properly monetized. You'll find that in the dictionary, under the word Yahoo!
The fine line between incremental and detrimental
It's easy to see why Google should make an online gaming play, even if it's a new way of thinking. It may not be a core competency at the Googleplex, but the same thing can be said of radio and television, and that didn't stop Google from trying to extend its advertising empire to be the king of all media. If the public is gravitating toward interactive games -- on their television sets, computers, MP3 players, and cell phones -- Google needs to reach them.
The worst thing it can do is ignore them. That would make Google not just a bad host, but a dumb one as well.
Done right, gaming can even be the shoehorn it needs outside of its paid search stronghold. What if Google's games played better on its new Chrome browser? What if proprietary gaming experiences is the one thing that takes Lively to the next level? What if a blockbuster title in China is what finally makes Google a worthy competitor to that country's top dog in search, Baidu.com
There is more to gain than lose at this moment, and yes there are things to lose. Google relies on the gaming industry for sponsors. The last thing it would want is for developers and console makers to scale back their marketing dollars going to Google, and thus fatten up the coffers of a rival. This is a delicate balance that Big G will have to master, but it will be worth it.
A challenging game worth winning is a game worth playing.
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Microsoft is a Motley Fool Inside Value pick. Netease.com, Google, and Baidu.com are Motley Fool Rule Breakers picks. Electronic Arts is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days.
Longtime Fool contributor Rick Munarriz is a fan of all three consoles, but finds himself spending way too much time with the family on the Wii at the moment. He does not own shares in any of the companies mentioned in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy is always there to make sure that Fools don't overheat.