The DeanBeat: Two stories that show the opportunity and heartbreak of modern gaming

The DeanBeat: Two stories that show the opportunity and heartbreak of modern gaming

Interested in learning what's next for the gaming industry? Join gaming executives to discuss emerging parts of the industry this October at GamesBeat Summit Next. Register today.

Yesterday, two stories told the tale of the modern game industry. On the one hand, heartbreak. On the other, massive opportunity.

Google announced that its Stadia cloud gaming service would shut down in January 2023, ending a high-profile bet to provide console-like quality games over the cloud to just about any user hardware. The company had spent a lot of money on each game it acquired (according to Bloomberg) and the masses of subscribers for the service never materialized.

Meanwhile, Savvy Games Group unveiled plans to invest $38 billion in gaming through 2030 to turn Saudi Arabia into a leader in gaming and esports. That was a stunning announcement about the confidence that the Saudis have in gaming as the future of entertainment and the key to the metaverse. Savvy will spend $13.3 billion in acquiring a big publisher, invest another $18.7 billion in minority stakes in other publishers, pour $533 million into early-stage gaming and esports companies, and then put $5.3 billion into mature companies that can be partners for Savvy.

Savvy already owns gaming and esports properties such as Nine66, VOV, ESL, FaceIt Group, and the FaceItSavvy Games Fund. The Saudi Arabia Public Investment Fund already has big stakes in Nintendo, Capcom, Nexon and Embracer Group. The goal is to create 250 game companies in Saudi Arabia and create 39,000 jobs by 2030.

Saudi Arabia has a lot of challenges around human rights, and it has issues as a nation, for sure. These big investments might distract people from those things. But at least the nation doesn’t have its head in the sand when it comes to recognizing the importance of gaming.

Game companies may have to consider those challenges and issues when they decide whether to take that money. But with the global economic slowdown taking root, it may be very hard to say no. It may be difficult to find deep pockets that are willing to make the big investments necessary to lift gaming to the next level. Already we have seen a lot of layoffs at companies — both gaming and tech firms — that are seeking to batten down the hatches for recession.

Logo of PIF funded Savvy Games GroupSavvy Games Group (SGG) is set to invest $38B in gaming and esports by 2030

How can two powerful companies see the future of gaming so differently?

Platform makers always have to puff out their chests when they’re trying to win over someone to their platform. I was there in the room at the Game Developers Conference when Google CEO Sundar Pichai and exec Phil Harrison pledged that Google was committed to gaming in March 2019. The presence of the Google CEO was meant to inspire confidence among developers, who would have to bet that Google would be committed to its Stadia platform.

Since that time, Stadia sputtered, shutting down its internal game studios relatively early. It had a delayed launch and the service wasn’t that impressive to players, either in the quality of cloud gaming or selection of games available. Worried about antitrust actions, Google did not — in contrast to Microsoft — buy a lot of studios to make games exclusive for Stadia. In other words, Google held back. It didn’t go all-in the way Microsoft is right now with its pending $68.5 billion acquisition of Activision Blizzard. Fear of antitrust enforcement is a good reason to hold back, but it may have doomed the company’s efforts at the outset.

The outcome was predictable, as Google had nothing to distinguish its platform from the others. But in his announcement of Stadia’s demise, Harrison cryptically said Stadia team members would take their passion for games to other parts of the company. And he said the company looks forward to having an impact across gaming and other industries using the foundational Stadia streaming technology.

I take that to mean that Google proved that its cloud gaming technology could work and was valuable, but the particular business that it started wasn’t a winner. That tech could still prove useful, and Google might still look for a way back into gaming. After all, most platforms recognize how important gaming is to the future of entertainment and future versions of the internet such as the metaverse.

I’m sorry for the Stadia employees who may lose their jobs, despite Google’s best efforts to place them in jobs elsewhere. But they will no doubt have opportunities that are funded by the massive amount of money that Savvy and Saudi Arabia are pouring into the game industry.

GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Discover our Briefings.