(Stadia Images)

Both Google and Amazon have more than enough tools and resources that they’d need to stake a claim in the market. The problem is that both seem to want to simply win by showing up, and that’s not something you can do in video games.

It’s been a rough few days for the gaming arms at the tech giants, which are suffering setbacks in their attempts to break into the industry.

Bloomberg last week delved into the internal culture at Amazon Game Studios. The goal was to explore why, in Amazon’s staffers’ own words, Amazon’s game development efforts have floundered. Eight years later, with several billion dollars spent, Amazon has little to show for its efforts, and the answer appears to come down to mismanagement at an executive level.

Just a few days later, on Monday morning, Google announced its sudden withdrawal from the games development business.

Despite a high-profile launch and hiring a wide swath of industry talent for its Stadia project, Google’s Phil Harrison wrote today that the company will stop investing in first-party content, and will shutter its two internal dev studios. The reasons behind the decision, as per Harrison, include the high investment costs and time requirements of “creating best-in-class games from the ground up.”

Stadia was the first strictly cloud-based gaming service to reach the market. As a subscription service, offered alongside a custom-made gamepad, Stadia could be used with a web browser or a Chromecast device to let players run video games in high definition straight off of Google’s cloud servers. On paper, any device with a strong internet connection and a screen could be used to play the latest games at their highest settings.

What’s held Stadia back, however, is that it initially shipped without all its promised features, such as YouTube integration, and a pricing plan where players bought their games individually at or near full retail price. Subscribers to the full service, Stadia Pro, would get free games each month as well as access to a variety of flash sales. This was controversial at the service’s launch — nobody’s really keen on the idea of paying to “own” a product that only lasts for as long as Google chooses to support it — and competing services have capitalized on that, such as Amazon’s Luna and Microsoft’s Project xCloud.

Going forward, Google’s plans for Stadia are seemingly to treat it solely as a publishing platform. “In 2021, we’re expanding our efforts to help game developers and publishers take advantage of our platform technology and deliver games directly to their players,” Harrison wrote. “We see an important opportunity to work with partners seeking a gaming solution all built on Stadia’s advanced technical infrastructure and platform tools.”

Stadia Games & Entertainment (SG&E) had an unspecified number of projects in developmen. While a few of the ones that were closest to complete may yet debut on Stadia, the rumor is that anything that fell outside of a potential 2021 release window has been unceremoniously canceled.

SG&E’s two studios were located in Los Angeles and Montreal. The Montreal studio was the result of Google acquiring a newly-founded indie developer, Typhoon, back in late 2019; Typhoon’s only game before the Google merger was the well-regarded indie “Metroidvania” Journey to the Savage Planet. In an unfortunate coincidence, Journey actually premieres on Stadia today.

Overall, SG&E’s closure is reported to affect around 150 employees. As part of the announcement, Harrison has said that “most” of that team will be moving on to new internal roles within Google, and will be supported by the company in the process.

One of the higher-profile developers at Stadia, however, is leaving Google entirely. Jade Raymond, who became famous in the industry in the 2000s as the producer of the first couple of games in Ubisoft’s mega-popular Assassin’s Creed franchise, had joined Google in early 2019 as the head of the Stadia Games and Entertainment department. Harrison noted in his blog post that Raymond has left to “pursue other opportunities” in the wake of SG&E’s imminent closure.

This doesn’t necessarily mean the writing’s on the wall for Stadia itself, but it’s hard not to think about the infamous “Google Graveyard.” The company had made a lot of big moves during the run-up to Stadia’s official release, including hiring some major names such as Raymond. Harrison himself is a well-known face in the industry, as a former member of both Sony’s PlayStation team and the Interactive Entertainment department at Microsoft.

With that kind of experience on tap, one would’ve expected Google to realize that if it was ever going to make “best-in-class games” for the Stadia, it was going to cost money and it’d take more than two years before they started seeing results. Unless there were significant internal issues that Google hasn’t divulged, shuttering its development efforts this quickly is like forfeiting a football game after the first quarter. In conjunction with the generally unfinished state of Stadia’s launch back in late 2019, it paints a picture of Google as not realizing, or choosing not to realize, what it would actually need to do in order to be competitive in the modern games industry.

This isn’t necessarily the end of the road for Stadia, however. Harrison is still the head of the project at Google, and Stadia is planned to continue to exist for the time being, now specifically as a publisher for third-party games. For current Stadia and Stadia Pro consumers, it’s business as usual.

“We’re committed to the future of cloud gaming, and will continue to do our part to drive this industry forward,” Harrison wrote. “Our goal remains focused on creating the best possible platform for gamers and technology for our partners, bringing these experiences to life for people everywhere.”