Google kills Stadia; speaks about how incumbent it is, and maybe not a platform anymore
Yesterday, Google killed Stadia, their game streaming project.
The idea of game streaming is neat. In principle, with a fast-enough internet connection, you don't need to buy expensive gaming hardware anymore (not like you can buy a Sony PS5 anyway), but you can just stream your game. A virtual gaming console sitting in the cloud processes in real-time every 4K frame of your game at sixty times a second, and your extra-low latency high-speed internet will make this run smoothly on your big screen TV.
In reality? That's a lot of elements that have to align just so, to make it possible to work. And specifically, in the U.S., the internet service providers aren't able to deliver fast, stable enough, and lag-free services.
So what would say? Why does it matter so much for Google?
Google is not a startup anymore
Firstly, it's past time we stop treating Google like a young, agile startup. It's an old incumbent that didn't age well.
Time and time over they demonstratedthey couldn't launchanyhting new beyond Search (with for sure the very notable exception Maps). The situation is so famously bad, that there are entire websites trying to track how many projects Google killed and what they were.
Is it still a platform though?
Beyond that, shouldn't we question Google as a platform too? If like Facebook (Meta) they can't get the hardware and software layers right at the same time, they sure are less of a tech company than Apple, Amazon, or Microsoft are.
The real power behind these last companies is that they an launch average products and services that once connected to other powerful platform network effect, become instant hits. Amazon white labels products, Apple gaming, or Microsoft Teams are successes by themselves, but because they gain exponential momentum form their mothership's platform.
A victim of the Dutch disease
To a large extent, Google is obvioulsy a victim of its own success. Search is the origin of their own Dutch disease. While they are still swimming in cash, it's only from one activity alone and this shows how fragile they are.
As I wrote just a few weeks ago:
Over-investing in a market or a flagship product that is currently making a killing means that you are defocusing and divesting from other parts of your portfolio. You understand quickly how dangerous it is for your long-term strategy as you become highly fragile to any unexpected event that would affect the current boom in the market you're becoming too focused on.
The in cauda venenum blow is probably far worse for a company such as Google...
What you don't evaluate, though, is how much you are losing key talents that don't fit with the current trend while demotivating future skills from joining you.
And that's the reason why:
Philippe MEDA
