We see this again and again. The cynic in me sees Stadia as yet another internal promotion scheme, masquerading as a product.
I doubt this will ever change. The internal momentum of the company culture will make it so. What does it mean for investors? Google has enough money they can just buy their way into markets indefinitely. It will probably keep them going, but I don't expect huge growth. I'd probably be putting my money into other stocks if I had to choose. I honestly don't think people would miss Google much if it was gone.
"We have some of the best cloud engineers in the world, we have one of the biggest fleets of data centers. Not a lot of companies could reasonably implement cloud gaming, but I bet we could!"
That part is true! But then:
"Productization? Pricing? Market-fit? Customer service and messaging? Whatever, we've got good tech, it'll sell itself. We can figure all that other stuff out later, that's the easy part."
...cue the flop. It was always going to be this way.
I’m quickly approaching 40, and I would like nothing more to not have to own the windows desktop that I only use for one thing. To play blood bowl 2 (and eventually 3) a few times a week. If I could do that from a browser on my MacBook, you can bet I’d never own another desktop in this life.
That’s anecdotal or course, but there’s quite a lot of us.
1) PC gamers tend to revel in owning (building, customizing, optimizing) their hardware; not just because it lets them play the games they want to play, but even for its own sake. RGB arrays, overclocking, custom case builds. Streaming can't compete with that.
2) "Casual" gamers already have powerful devices in their pockets with thousands and thousands of games available, including many free ones and many high-quality ones.
3) Console gamers are presumably the target (?) market. But an Xbox Series S costs $299. The (absolute minimum) Stadia starter kit costs $99; you're already a third of the way there. And then there's the subscription fee. And then you still have to buy the games. Something I don't think Google realized is that over a console generation, the dominant cost quickly becomes the games themselves, not the hardware. If Stadia users still have to buy them at full-price - $60 a pop - that $200 you saved at the beginning quickly becomes a diminishing fraction. You just aren't saving that much, and in exchange, you get the constant risk that your whole library will simply be killed at any moment, as well as...
4) The latency. The problem with latency is it's not a fully solvable issue, no matter how much hardware or money you throw at the problem. There's a physical lower bound on how long it takes electricity to get from your house to a data center and back. And then there's all the routing infrastructure run by your ISP, which a) is outside of Google or Microsoft or whoever's ability to improve, and b) is unlikely to be improved by the ISP because game streaming is basically the only usecase where bleeding-edge latency actually matters. And in terms of how much it matters: one frame at 60FPS translates to 16.7ms. Client-rendered multiplayer games don't have as much of an issue with higher latencies because of client-side prediction: https://en.wikipedia.org/wiki/Client-side_prediction
Here's the only way I could see game streaming being successful:
An all-you-can-eat, Netflix-style buffet of big-budget games. Like Apple Arcade, except it has games like Call of Duty and Borderlands that you could normally only play on a console or a gaming PC. You pay a monthly fee, and you never have to buy or even download a game. Dedicated thin-client hardware is a waste; anybody who wants to buy hardware will just buy a console. Your target customers don't want that. Instead this would only be playable on existing platforms, primarily desktop/web/mobile, though possibly existing consoles as well.
That would be a decent value-proposition for some people. Those playing really fast-paced games and/or sticklers for latency wouldn't go for it, some existing phone-gamers might, but mostly you would get people like your friend from college who just wants to play Borderlands with you but isn't really a "gamer" outside of that.
Microsoft is the most clearly-positioned company to succeed at this, as far as I can tell. They have two decades of experience in the industry, they have cloud chops and datacenters, and they carry clout with publishers and even have in-house studios (because a subscription-only game buffet it going to be a tough sell when it comes to license-holders).
And of course they've already started: Xbox Game Pass is a smallish version of the all-you-can-eat subscription, and they've been experimenting with cloud-hosted releases. You can even play Control on your Nintendo Switch via Microsoft's cloud. That's pretty cool.
But I don't think this will ever make gaming PCs or even consoles obsolete, mainly because of the unsolvability of the latency issue. It will be good enough for some people.
Oh and Stadia will die anyway, because Google doesn't understand any of the above
Most AAA games already have 200+ ms delays between pressing a button and anything happening on-screen. So there's plenty of room to redesign things to work around that latency in a lot of games
(This obviously doesn't apply to high-end play on twitch shooters or fighting games though, those are pretty much screwed when it comes to streaming)