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Alphabet Aims to Remake Gaming with Stadia — But Gamers Have a Lot of Questions

Alphabet (GOOGL) has an ambitious plan to reshape the future of gaming, but it will be far from easy.

To an audience of developers and game enthusiasts at GDC this week, Google took the wraps off Stadia, a game streaming platform that the company says will revolutionize the way games are experienced. Alphabet’s shares were up 1.17% on Tuesday.

Google CEO Sundar Pichai and a fleet of executives premiered Stadia at a keynote event, which billed the new offering as a “game platform for everyone” that will work on any device or browser. Stadia has a few components: A custom-built, Wifi-enabled game controller, a lot of engineering firepower, and Youtube. Google also teamed up with AMD (AMD) to create custom GPUs for Stadia, which will be housed in Google data centers that power the experience.

The main idea behind Stadia? Through a “Play Now” button on Youtube, gamers can be launched directly into a game — to be played on any computer, TV, tablet or phone.

That was an intriguing proposition for many GDC attendees, with gamers flocking to Google booths to take a look at demonstrations and Stadia controllers on display at the conference.

But many developers and game professionals also expressed some reservations about the tech.

Adam Engelbrecht, a gamer who participated in the beta program for Stadia, said that while the service worked most of the time while testing Assassin’s Creed — the only game available during the test — it also had its quirks.

“There were times when the game would, for lack of a better phrase, become blocky or blurry, whatever you want to call it,” he said. “I’d compare it to the old days of streaming video services. When you had a slow internet connection, Netflix would degrade in quality and do the same thing. You could still play the game, but it definitely wasn’t optimal.”

He also expressed surprise that Google partnered with AMD to build the gaming GPUs, reasoning that Nvidia is the market leader in gaming GPUs.

“I would have thought they’d work with Nvidia to provide the best experience they could for customers,” he added, noting that the best-performing GPUs also use a considerable amount of power. “I suppose I’m just wondering how they’re going to put it all together.”

Another hurdle that Alphabet is facing: Winning the love of gamers when there isn’t much gaming in the company’s DNA.

Microsoft (MSFT) and Amazon (AMZN) are also said to be building game streaming services, with Microsoft publicly working on a cloud streaming service called XCloud alongside a development kit called Game Stack. And all three tech giants have a public cloud service and extensive architecture resources to back up their game offerings, and each has certain advantages.

Anchored by Xbox, Microsoft already has a deep footprint in gaming, and Amazon’s beloved Twitch platform is a central meeting place for gamers worldwide.

Google brass made the case that the popularity of gameplay videos on Youtube means there’s an open field for selling game services to Youtubers, noting that 200 million daily users watch gaming content on the site. Google believes it can convert those viewers into players with the Stadia platform and controller, which also features a button specifically for game capture.

But it could still be an uphill climb to earn the loyalty — not the mention the spending power — of dedicated gamers, according to Patrick Moorhead of Moor Insights & Strategy.

“Real gamers consider YouTube a big letdown so far and Twitch rules for them,” he said. “YouTube and Stadia need to think hard how they are going to capture the hearts and minds of gamers because they don’t have them now.”

Around GDC, Amazon, Alphabet and Microsoft all hosted panels and sessions with the goal of appealing to both game developers and players — in part, by touting their cloud prowess and collection of services aimed at building, monetizing and improving games. And who succeeds in the burgeoning game streaming market will be determined in part by who’s most effective in stitching together technological components, as well as leveraging the enthusiasm of existing gamers.

With the caveat that it’s an early market that may change, Moorhead estimated that Microsoft is most likely to succeed in game streaming, followed by Amazon and then Google.

For its part, Google hasn’t announced how much Stadia will cost, either for the controller or for any subscription fees associated with the streaming. It also hasn’t specified what games will be available at launch, or how it will manage the Youtube integration. Nonetheless, the company says Stadia will be available in the U.S., Canada, the U.K. and most of Europe sometime this year.

Until then, plenty of technologists and industry analysts will be wondering how it will all come together — and how well Stadia will work once launched.

“Google never talked about how they solved the hardest experience part of the equation, the latency from the carriers to the home,” Moorhead added. “Unless Google is doing deals with the carriers, I’m still expecting ‘hit or miss’ experience.”