Written and posted by Akaash
*The below opinion article is written and posted on 4ScarrsGaming.com by Akaash. If you have any thoughts or questions, feel free to leave a comment below.*
Only time will tell if Microsoft successfully kneecapped Google when it comes to Azure versus GCP market share, and by extension, Google’s foray into console and PC style gaming. Google is still one of the leaders on the mobile front. Right after Stadia launched, Microsoft stated that Google and Amazon were its main competitors, to the dismay of many PlayStation fans. But delving into that February 2020 statement it quickly became apparent that MS was talking about Azure vs AWS and GCP.
It seems increasingly clear that these corporations along with their incredible world leading, non-twitter armchair analysts (I see the irony), and due diligence understand that the Cloud Pie (not merely gaming pie) is set to increase. And it's that gaming pie that will be one of the largest which moves into the cloud in the coming future. In my opinion, Google getting involved in gaming and utilizing GCP is and was an advertisement for GCP for it’s reliability, durability, and integration with other Google tech. It was also a way for Google to have a real stake in the cloud, being in third place and all.
AWS almost seemingly can’t be caught within the next few years at the very least. Actually with their market position and leadership in the cloud, it probably won’t ever be caught. Azure and GCP are closer to each other, than either are when it concerns AWS. So how would GCP and Stadia catch up to Azure and Xbox? A good strategy might have been to build a first party studio, and build relationships with publishers and Devs that really know Vulkan well. And perhaps to have large publishers and devs get on board using GCP as their backbone for possible channels on Stadia or it’s own service itself that it can directly sell to consumers.
But what happens if a pandemic hits the moment you launch your gaming service? What happens to your first party studios and those teams behind them? Are they hindered to a large degree from collaborating effectively? Or if a Dev like Bethesda who was brought on stage during the 2019 GDC with extensive Vulkan development experience gets acquired by your competitor just two years later?
Fast forward to the Bethesda and Stadia relationship, it was seemingly going well. Then all of a sudden Microsoft swoops in and devours it. SG&E sometime thereafter closes and some reports indicate that Microsoft’s acquisition played a role in that decision. Microsoft, in my opinion, is playing high level chess at protecting Azure, it’s cash-cow even more than Xbox in the end. But this move by itself damaged both Stadia and a potential GCP customer.
The Activision deal is perhaps an alignment of stars for Microsoft. GCP already had a contract to host Activision Esports and perhaps other Activision deals. Now, as the GCP contracts expire Microsoft will slowly but surely transition Activision out of GCP and onto Azure. One less massive customer it needs to worry about going to either AWS or GCP in the future. Looking at the field now, Microsoft controls quite a bit of studios that will eventually be on the Azure Cloud.
Additionally, perhaps Microsoft wants Azure to be the go to cloud for cloud gaming and it’s put its money up to ensure that. Or at the very least, it’s ensured that Activision and Bethesda won’t be GCP or AWS customers, thereby already carving out it’s cloud gaming pie. Google and Amazon don't have this segment of the cloud market cornered. So where does this leave these players?
Microsoft is making good on its telegraphed February 2020 strategy - that Amazon and Google had been their competitor. Gaming will utilize the cloud more and more in the next few years. Microsoft is uniquely in the cross-section of both the cloud and gaming and it’s pulled the trigger - hard. Even after it’s Activision acquisition they reaffirmed that position stating inter alia that that gaming could be theirs as search is for google and social media is for Facebook. And now, Microsoft has officially stated that Facebook is seen as a competitor to its gaming ambitions.
I think Amazon is in great shape, since it's the preeminent market leader for Cloud anyway. It’s taking its time building out what it wants from Luna and Amazon Game Studios. It already knows it has amazing goodwill attached to it with AWS. And it’s Capex spending for 2021 is the combined spending of Google and Microsoft. I’m pretty sure they're confident that if a publisher or dev is in need of a cloud AWS will still be at least top 3 on any publisher’s list - no matter if Luna is in a perpetual state of beta.
Google on the other hand is still trying to improve its position in the cloud space. I'm sure their goodwill has improved quite a bit. Nurturing strong partnerships like with Bethesda and maintaining one with Activision Esports may have been the bedrock for GCP in Cloud gaming and by extension to Stadia. There are others that would have been important pieces to its strategy, perhaps. The relationship with AT&T and a few others have been some of the few bright spots announced.
I think Stadia will continue to be like Google’s Nexus; selling the ideas and features behind its technology to OEMS and being an example of what things could be like. Selling the tech until it’s ready to evolve and morph into its own analogous Pixel-like-being while it attempts to gain market share.
Many Stadia gamers and cloud aficionados want Google to buy up studios and to make content. But that’s not entirely the Google way, at least from my Twitter armchair. Google may attempt to replicate its success with patterns it’s used in the past. It’s simple. Just look at other products that have succeeded or have begun to get better. YTP, YouTube TV, and Nexus-to-Pixel. Outside of this, I would certainly love it as a gamer to see Google do something gameresque, but that’s just not them - at least not yet (the only caveat to that is Google Play Gaming but that’s another conversation). It’s only been a few years of Stadia existing in a largely developed gaming industry whereupon the cloud segment is in its infancy.
I think Microsoft brass has recognized this and has moved quickly to counteract its competitors. And while Microsoft does have the cross-market advantage, only time will tell if they can actually elevate gaming as a whole and improve cloud gaming and their positioning. Honestly, the ball is in their court and I think deep down they know it.
Microsoft has made promises about a cloud gaming first future as long as I could remember with Crackdown and not much came of it. They made promises with HoloLens and it's now dead. They made promises with xCloud showcasing it as Project xCloud back in October 2018, but it remains pretty lacklustre in terms of performance and features as of February 2022. Why is Microsoft using Rainaway web streaming tech again and not Microsoft themselves?
Additionally, Azure’s reliability is questionable against AWS and GCP. Xbox live seemingly goes down a helluva lot more than PlayStation and YouTube for me. And despite Xbox having a couple dozen studios under its banner, it still struggles to get close to the output of AAA titles that Sony and Nintendo produces. And while Gamepass is the industry’s golden child, I’d still wager that folks still want their Breath of the Wilds and Last of Us hitters. Halo, Gears and Forza are great - but I’d argue it’s still not on the pedigree of Sony’s AAA titles.
So here we are, the trillion dollar juggernaut in Microsoft sitting atop the cross-section of Cloud Computing and Video games, by itself. They aren’t the best cloud provider and they aren’t the best at making games. And in my opinion, Gamepass has been one of the best sleight of hands to prop up goodwill we have ever seen. As a business strategy, it’s brilliant. But as a cloud gaming enthusiast, I really want to see this segment flourish. But I have this feeling that with Microsoft at its helm it's not necessarily trying to improve the segment. Instead it’s just trying to stop it’s perceived competitors from entering successfully and doing a better job than them at it. So far, they are successful at that strategy.
Where does this leave Stadia, GCP, Google Streaming, Google Play Games etc? I’m not sure. But if Sony is the AAA gaming bar, Stadia imo is the cloud gaming tech bar. Microsoft is neither. If Google plays the long game, perhaps, this time things may not work out for them as it has in the past where it’s caught Microsoft and others off guard when it’s infringed on their territory. Or perhaps, things may still work out since Microsoft can’t seemingly buy out the entire gaming industry and GCP and AWS will eventually have it’s own set of customers once a larger transition to cloud gaming occurs. This is a long game for Cloud services as well, not just cloud gaming. There’s billions of dollars at stake yearly.
I’m still optimistic about Stadia’s future and the cloud gaming future as a whole. It’s still so early for cloud gaming for anyone to declare a victor when there doesn’t ever need to be a single victor. Nike, Rebok, and Adidas co-exist fine. Netflix, Disney+, HBO Max, and Hulu coexist fine. Sony, Nintendo, and Xbox have co-existed just fine for decades. Everyone can enjoy their preferred platform of choice and be critical of things they like or don’t like and it’s fine.
But no one needs to say platforms need to die or go away. It’s childish and anticompetitive. However, I do recognize it's also your right to be childish, if you choose to be. And, if you want to move to a different platform because you’ve lost faith in a product that’s also your right. I’ll continue to be a critical gamer and prefer Sony and Stadia, but I won’t ever say I want Xbox, Nintendo, or Luna to die in a ditch. It’s just childish. But that’s just my opinion.
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