Google is shuttering Stadia studios without releasing a single game

The company's cloud gaming service came out of the gate with big ambitions but struggled to deliver and now faces tough competition from Microsoft and others.

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Google's Stadia, the company's ambitious cloud service that allows gamers to stream console-quality titles over the internet, is shutting down its in-house development studios, one in Los Angeles, the other in Montreal. Considering that game development timelines reach into the years, and Stadia only launched in November 2019, it's unsurprising that the studio idea failed to produce a single game.

According to a blog post announcing the move, Stadia itself isn't going anywhere. Google will continue to operate the service and its $10 monthly Stadia Pro offering, meaning that new titles will continue to be released on Stadia, though the service likely isn't going to get many exclusives that would help it compete in a crowded environment.

Google said late last year that it has 400 games in the pipeline from 200 developers — after today's news, it will be interesting to see if those developers still have enough confidence in Stadia to follow through.

The two studios that Google is closing employ around 150 developers who are expected to be laid off. Jade Raymond, who previously worked at Ubisoft and EA before joining Google to develop in-house exclusives, is (understandably) leaving the company.

High expectations and underwhelming results — The state of Stadia has been sad, to say the least, especially considering Google was first out of the gate with a vision for the future that decoupled gaming from expensive hardware. Stadia promised the ability to play console-quality games from anywhere, so long as users had a good enough internet connection. That had the potential to open gaming up to many people who otherwise wouldn't participate. But Stadia was supposed to go even further with useful features, like the ability to hop directly into a game you were watching on YouTube.

The streaming itself is considered to work very well — titles like Cyberpunk 2077 shine on Stadia — but promised features have taken longer than expected to roll out. In the meantime, Google was quickly challenged by Microsoft, which launched its own xCloud streaming service and Game Pass Ultimate subscription featuring a large lineup of popular AAA titles. Stadia doesn't offer nearly as many popular games, and the Stadia Pro subscription service offers an even smaller number. Most have to be purchased at full price, whereas the entire Game Pass lineup costs just $14.99 per month.

Back to basics — Ultimately it seems Google bit off more than it could chew by trying to get into game development before it even had the technology figured out. It probably should have concentrated efforts on making a really good streaming service before trying to get into originals a la Netflix.

The decision to kill the studios suggests Google isn't confident enough in Stadia to continue investing in expensive game development that won't see a return on investment for many years, if at all.

In its blog post, Google says that it may try and pivot Stadia into a white-label product for developers to stream games inside their own websites or apps. “We see an important opportunity to work with partners seeking a gaming solution all built on Stadia’s advanced technical infrastructure and platform tools,” wrote Phil Harrison, Google's head of Stadia operations. “We believe this is the best path to building Stadia into a long-term, sustainable business that helps grow the industry.”