Google is taking major steps to jump into the videogame industry, announcing Tuesday a new streaming platform that it will launch this year as well as an in-house videogame-production unit, though it neglected to lay out costs.
Gaming titans have long chased streaming as something of a Holy Grail, anticipating that unburdening people from expensive desktop computers or gaming consoles to run the best titles will drive millions more to play games. Often called cloud gaming, streaming technology lets people play the most complex and graphically intensive titles on virtually any hardware, including mobile devices.
Alphabet Inc. (NAS:GOOGL) (NAS:GOOG) announced its major foray into the sector Tuesday at the Game Developers Conference in San Francisco, where Google Chief Executive Sundar Pichai unveiled Stadia. The streaming service aims to combine elements of YouTube, the company’s massive cloud infrastructure, its Chromecast streaming stick and a new piece of hardware — a controller — for its platform.
“There are a lot of barriers to play high-end games, beautiful graphics really need high-end consoles or PCs and games don’t have instant access,” Pichai said on stage. “Think about the way the web works, you can easily share a link and it works seamlessly. We want games to feel that way too.”
Built on the back of Google’s global data-center empire, executives said the company is working with Advanced Micro Devices Inc. (NAS:AMD) , which will supply custom graphics-processing-unit hardware to power the core of Stadia streaming.
Executives showed off the new platform’s ability to launch “Assassin’s Creed Odyssey” from a YouTube video link, switching from laptop to mobile phone to television. “Odyssey” is a “AAA” title from Ubisoft Entertainment SA (OTC:UBSFY) , a designation that denotes the game requires advanced graphics hardware typically found on a PC or console.
Google did not offer details on how it would price games offered via the service, what it planned to charge developers to use the platform, nor the cost of the Stadia controller. Google could structure Stadia similarly to the Play Store model, where developers sell access to their games and split the revenue with Alphabet, instead of charging a subscription fee for users. Executives said they would offer more details about what titles would be available at a launch in the summer, promising to launch the service within the year in markets such as U.S. and Canada.
In general, streaming services offer videogame giants the hope of attracting new customers — because they won’t have to buy expensive hardware, among other reasons — and will have the ability to deploy the massive resources of data centers. Without the constraints of a single machine such as a PC or console, those resources could be used to build advanced machine learning into games, create massive levels within the games or even reduce load time.
Reduced load time was among the features Google touted when it courted developers at GDC. Executives also demonstrated the advantages of deploying multiple GPU instances to power a single game, and applying machine-learning technology to add graphics layers in real time that previously was impractical on a single computer.
“The data center is your platform,” said Majd Bakar, head of engineering for Stadia.
Multiplayer titles could benefit substantially from running in Google’s cloud. Among other advancements, Stadia could let thousands of players participate in a “Fortnite”-like “battle royale” game, versus the current max of roughly 100 per round.
The new videogame studio, Stadia Games and Entertainment, will be run by Jade Raymond, who has produced “Assassin’s Creed” titles and several other games.
Google is not the only tech company interested in videogame streaming. Nvidia Corp. (NAS:NVDA) has been running a beta version of a game-streaming service called GeForce Now for more than a year, attracting more than 300,000 monthly active users and a wait list of 1 million hopeful players.
Nvidia’s offering at the moment lacks many of the social features Google unveiled. For example, Stadia will have the ability for a player to share a specific section of the game, like a boss fight, for others to try their hand. While Nvidia offers GeForce Now free to gamers — the company maintains it has not achieved a product it is comfortable to charge for — the chip maker said Monday it has inked partnerships with Softbank (TKS:JP:9984) and LG (KRX:KR:066570) to white-label a form of its GeForce Now with a revenue-sharing agreement.
Videogame giant Electronic Arts Inc. (NAS:EA) has also demonstrated a streaming service but has not yet launched it. The company already offers gamers a subscription service where it grants players access to a host of titles for local download. Microsoft Corp. (NAS:MSFT) and Intel Corp (NAS:INTC) have also made moves in the sector, and Amazon.com Inc. (NAS:AMZN) — which owns Twitch — has been reported to be working on a streaming-game service as well.
Alphabet stock closed up 1.2% Tuesday, as the S&P 500 index (S&P:SPX) was down less than 0.1%. AMD stock surged 12% after Google confirmed that AMD’s hardware would power Stadia.