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  • The Seville Reporters

In Focus: Stadia... On Second Thought

Updated: Dec 15, 2019

Not so long ago a company came out of nowhere moved the reigning king out of the way and won the internet. The company was Google, the reigning king was Yahoo. Hard to believe it in 2019, but Yahoo was supposed to be everything that Google is today.

Like most great American businesses Google's success made a lot of people rich and made its users happy. It's difficult to convey how happy Google made its users upon its arrival because the gap between Google search and others has closed quite significantly. In 1998, 1999, 2000, searching the internet for anything was an adventure. Google came in, took away the adventure that was search and replaced it with a page or more of exactly what you searched for.

Over the years Google search got bigger and better. On the outside it was an internet search company, but on the inside it was an advertising company. It used all of the information gathered from search to sell better ways to advertise to advertisers. Google became a printing press for money, making more and more money as more people gained access to the world wide web and the internet grew. All of this money allowed Google to create different ventures in an attempt to not be solely dependent on search.

The plan to decrease the dependency on search worked. The company created Gmail, Google Docs, and acquired YouTube. More ways to collect data to serve better ads. As smart phones came into existence Google went mobile with Google Maps and other apps. More users, more data collected, more advertisements sold.

Not all ventures have been a roaring success for Google. The road to the riches and diamond rings became very bumpy at times. Google Glass is the one speed bump that many people remember, but there were so many more. Google Buzz, Google Moderator, Buffer Box, Google Nexus, Google Talk, Bump, Google Waves, and Google Plus to name a few. You can find a more extensive list here.

What's lost in the list of failures is the data gathered. For all the messaging apps Google has started and stopped in the past, the best features of those programs found their way into Google Hangouts. The Google Pixel was able to pick up where the Google Nexus stopped. The company has been able to fail upwards with a lot of its misadventures, but can Google do it again?

Can Stadia Fail Forward

Now the company has another venture, and the initial responses to the venture aren't good. Google rolled out Stadia this week and gamers have found many issues to complain about. Some of the issues being a lack of games, some latency issues, and the roll out not being what was promised by Google.

This leads me to the question of how committed is Google to Stadia? Many companies before Google have been seduced by the potential of the gaming market, only to jump in and die a fast quick death. Gamers are a critical bunch, to get them on your side you have to exceed expectations, and Google did not do that.

It's not a surprise that the role out of Stadia isn't great. We're in the infancy of cloud gaming. To expect a perfect roll out was unreal by gamers, fans, and investors. Issues should have been expected, and from what I've read and watched too many users expected a perfect roll out. Sometimes I have to remind people that the first iPhone didn't allow users to view the internet and listen to music at the same time. Companies, even those as big as Google need time to create that close to perfect product.

With that said, one thing that also became evident after the hype of Stadia wore off is Google is not a game developer, so it doesn't have a signature game. Nintendo had Mario, Sega had Sonic, Sony had Crash Bandicoot and Gran Turismo, Microsoft had Halo, hell even TurboGraphx 16 had Bonk, what does Google have? I don't know if this will necessarily be a long term problem, but it has given gamers today a reason to hold off.

But back to the question, will Google stick it out or will Stadia be the next Google Glass or Google Plus? My gut is that Stadia has a five year audition period. Sadly for Google it's only going to get tougher from here. Google has become what Sega used to be, the first one out the gate.

Sega during its time making gaming systems always pushed the envelope and always came with an offering better than what was on the market. The Sega CD, Sega 32X, Sega Saturn, and the Sega Dreamcast were good products. But being first has its consequences. The Sega Dreamcast released in 1999 couldn't play DVDs in a time when DVD consumption was exploding. A year later Sony released the Playstation 2, and it played DVDs. Sony won, Sega lost and the Dreamcast was discontinued in 2001.

There is no doubt Microsoft is sitting back and watching all that has gone wrong with Stadia as it builds out its own cloud gaming network, Project xCloud. Microsoft has a lot going for it and its cloud gaming venture. Microsoft has close to 20 years of video game industry knowledge, they have a signature game in Halo, they have a world class cloud business and infrastructure, and they have the Mixer streaming service. Sometimes entering second is not so bad.

I had high hopes for Stadia. I was really excited to see the technology in action, I was excited about a new entrant into gaming, but the roll out of Stadia has dulled my excitement. Then I remembered that Google is an advertising agency with amazing data collecting ability. Stadia likely has less to do with moving video game technology forward and more to do with giving Google another way to collect data. Yet, I'm still hopeful that Google will fail forward with Stadia and create a better product over time, fingers crossed.


What is The Seville Report

The Seville Report is our attempt to bring world class investment research to people who feel world class investment research isn't available to them. We also want to demystify the stock market for people who wouldn't normally think of putting their money in the stock market. Our research comes quarterly via our newsletter, The Seville Report. We use the website and this blog to share thoughts and ideas about the markets and different companies.

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