Video game

Google and Nvidia display competing views of the future of streaming videogames – MarketWatch

At different ends of the Bay Area, the CEOs of two tech giants espoused different visions for a streaming future for videogames on Tuesday.

Alphabet Inc.’s

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 Google made the bigger splash by far in unveiling a videogame streaming service called Stadia at the Game Developers Conference in San Francisco. Google talked in broad strokes about a service that allows players to access games from a variety of devices without having to buy a console, high-end gaming PC or other expensive hardware — gamers instead play within the Chrome browser.

In San Jose, Jensen Huang, co-founder and chief executive of Nvidia Corp.

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 , detailed the direction of his company’s GeForce Now streaming service, which has been in beta for nearly two years now. Even in its early form, that service has 300,000 monthly active users with a waiting list of 1 million potential gamers, Huang said.

Nvidia has been a major part of the videogame industry for decades, as the most prominent manufacturer of the graphics chips that have helped games grow from digital blobs moving slowly around a screen to cinematic adventures that have forever changed the idea of what entertainment can be. Huang discussed his thoughts on the future of streaming videogames during a question-and-answer session with reporters at Nvidia’s annual GTC conference, where he announced new moves for GeForce Now.

“We don’t believe that ‘Netflix of gaming’ is the right approach, because we don’t have a discovery problem for gaming,” Huang said, explaining that the videogame industry is typically dominated by about five to 10 games at a time.

Read: Why there may never be a Netflix of videogames

While Huang said he would address only his service, those remarks seemed to shed some light on his thoughts on Stadia, which appears to be an approach similar to Google’s own Play Store and Apple’s App Store — a marketplace connected to YouTube and other services that leads consumers to content, with the revenue split between Alphabet and the game publishers.

“The store business model does not work great … [and] I’m not exactly sure how advertising works in there,” Huang said. “For PC games, it hasn’t proven to be that effective.”

In summation, the seasoned videogame executive said, “Leave the economics completely to the publishers, do not get in the way of their relationship with the gamer.”

Google not only appears to be trying to put itself between the publisher and the consumer, but is also becoming a publisher itself, announcing its own in-house videogame production unit led by a former Electronic Arts Inc.

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  executive. Google did not announce any partnerships with EA or top videogame publishers like Activision Blizzard Inc.

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 and Take Two on Tuesday. It did demonstrate “Assassin’s Creed Odyssey” from Ubisoft Entertainment SA

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, the same series that was featured in its Project Stream demonstration of the technology, and “Doom” publisher Id Software joined it on stage.

Also see: Activision in talks with cloud providers for videogame streaming

As is typical, Google is betting on a future reality that executives believe will happen instead of building a service for the reality of today. That has served the company well in many of its gambits so far, and likely puts it on a similar path to rivals. Inc.

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 is also believed to be working on a videogame streaming service, and already owns Twitch, which was an obvious target of Google’s pairing of game streaming and YouTube. Apple is also working on its own “Netflix for videogames,” according to earlier reports, and is hosting an event next week in Cupertino, Calif., that could bring more details. Microsoft Corp.,

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 , with its Xbox business hanging in the balance, also has its nascent Project X in the works.

Colin Sebastian, an analyst with Robert W. Baird, wrote in a note that Google’s streaming approach could bring more consumers into the gaming market.

“While more hard-core gamers don’t have objections to high-priced hardware, we believe eliminating big-ticket console purchases should expand the videogame total available market, initially on the casual end of the spectrum, but over time to AAA titles,” Sebastian said in a note to clients.

Anyone who has dealt with the hard-core gaming community, though, knows how tough they can be on any company that does not satisfy their needs. Streaming services that attempt to attract new users without offering anything for the current core gamers will likely face a barrage of negativity and a rough early life that could doom it before it actually finds a new audience.

Nvidia’s approach also could expand the audience, as it seeks to offer high-end gaming on machines that don’t have its high-end equipment. At GTC, Huang revealed this week that Nvidia is partnering with telecommunications companies in other countries, providing them with servers that can run its GeForce Now service — as a start, Japan’s SoftBank

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  and South Korea’s LG

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  plan to sell the service to their customers and split the revenue with Nvidia.

Huang thinks that is the type of approach that could draw new gamers.

“The [Geforce Now] service is probably for the billion PC consumers who don’t have GeForces,” referring to Nvidia’s gaming cards.

While that may be, Google appears to be building a service for those who don’t even know what a GeForce is — those who watch other people play videogames on YouTube and want to try the games themselves. Stadia offers an easy way to access those games, likely at a cheap price and without the difficulty of signing up for a streaming service that has 1 million waiting just to try it and may require interacting with one’s internet provider.

While Huang defended how gamers want to play today, the news from Google could represent the future of where gaming is going, at least perhaps for the less hard-core gamers. The Netflix analogy is apt for gamers as well: Just as hard-core cinephiles still prefer to see many movies on the big screen while the larger, mainstream audience is at home streaming at their convenience, the same could be said for the serious gamers versus the casual enthusiasts.

Neither approach feels perfect — Google may struggle to find support from hard-core gamers and the videogame industry, while Nvidia will likely struggle to move beyond its base of hard-core gamers. Don’t worry, though, it feels like there will be a lot more offerings coming soon from other companies that believe they can create the long-expected but potentially impossible “Netflix for games.”

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