Cloud gaming: Stadia, the example of a market that does not forgive the slightest error

Google is not the first company to stumble in this market. What are the factors that explain the difficulties in finding a place there?

Before launching Blacknut in 2016, I looked at the entire corporate graveyard of cloud gaming who had started before. At the time, I was particularly interested in OnLive and I contacted the leaders to understand why it had not worked. To do a service of cloud gaming successful, there are three pillars: content, infrastructure and market access. Most of the failed services addressed a user base gamers. Or create a service for gamers is the pre-condition for a whole bunch of elements that will contribute to the failure of the service later on.

If we address the gamersyou must first have the games for the gamers. This means that you have to get the biggest licenses, the most difficult to obtain and which cost the most. This involves very large investments. Then, you have to have an infrastructure for gamers. As the latter already have their console, the service of cloud gaming must have a level of quality almost equivalent to that of the console. It’s super difficult, because the cloud gaming remains dependent on the network, the bandwidth… It’s complicated.

So you have to have the best games, but for that, you need the best infrastructure, which induces monstrous investments. In addition, this means addressing a user base that is the most difficult to satisfy, with players who own consoles as a reference. This is where OnLive crashed, because it suffered monstrous investment costs in content and Capex. Also, there was no bandwidth or fiber back then. It was therefore very difficult for him to address his user base.

The same problem arose for Shadow. The promise was to offer a state-of-the-art PC in the cloud, but marketing such an offer for only a few tens of euros a month did not work, because the promise could not be kept. Having the latest PC in the cloud means investing in the latest graphics cards all the time. It was complicated over time.

As for Stadia, the problem was different. He went to the end of the infrastructure, but did not have the supply of content or console satisfying demand. Google had the infrastructure unlike Shadow, but the content offering killed the service.

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