Take-Two CEO Says Stadia Has Been a ‘Disappointment’

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Google is not the first company to try its luck at cloud gaming, but game developers seemed more excited by Google’s Stadia service. In the months leading up to launch, Google signed numerous partners, including Take-Two Interactive, but the bloom is off the rose just six months after launch. Take-Two CEO Strauss Zelnick says Google overpromised, and he questions the value of cloud gaming as a whole. 

Stadia, GeForce Now, Microsoft xCloud, and other cloud gaming services operate in the same basic fashion. A server someplace runs your game and renders each frame with powerful hardware. The video of the game streams across the internet to your device, and your control inputs go back up to the server. You don’t need a game console or a powerful video card — even a phone can play AAA games via streaming services. 

Speaking at the Bernstein Annual Strategic Decisions Conference, Zelnick says the slow Stadia launch has been a disappointment to customers. Google showed off numerous custom Stadia features, but games have thus far failed to take advantage of them. In fact, many basic features like achievements and gameplay recording took months to materialize. Even now, the selection of games has not matured.

Zelnick’s reading of the market could spell trouble for all streaming services. The business model of Stadia and other cloud gaming services relies on the assumption that more people will play video games if they don’t need dedicated hardware. But will they? As Zelnick points out, we’re talking about games that cost $60, and some special edition games can reach $100 or more. Are the people willing to buy a $60 game really unwilling to buy a $300 console?

“The belief that streaming was going to be transformative was based on a view that there were loads of people who really [had] an interest in interactive entertainment, really wanted to pay for it, but just didn’t want to have a console,” Zelnick said. “I’m not sure that turned out to be the case.”

Cloud gaming also bets on internet connections getting faster and more reliable. Currently, most people don’t have enough bandwidth to stream high-resolution Stadia games without interruption. That might change as 5G rolls out, but that could take years. A console costs more upfront, but it doesn’t have as many limitations. Zelnick wrapped up his comments by saying he’s excited about streaming technology, but he doesn’t expect it to significantly expand the gaming market.

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