Sat. Sep 24th, 2022

A year ago, Take-Two CEO Strauss Zelnick said he was “pretty optimistic” about Google’s game streaming service Stadia. The concept of “being able to play our games on any device around the world, and to do it with low latency, well, that’s very attractive if that can be delivered,” he offered in May 2019.

Now Zelnick has changed his tune a bit though. In an interview given late last week at Bernstein’s annual strategic decision-making conference, Zelnick acknowledged what viewers have been clear for a while: “The launch of Stadia was slow,” he said. “I think there was a little too much promise about what the technology could deliver and some consumer disappointment as a result.”

While major publishers like EA and Activision steered clear of Stadia’s “Founders” launch last November, Take-Two delivered three of the service’s most notable games in its early months:Red Dead Redemption 2NBA 2K20and Borderland 3† And Zelnick said such Stadia support will continue in the future “as long as the business model makes sense.” (Take Twos) PGA Tour 2K21WWE2K battlefieldsand the mafia series are currently scheduled for future Stadia releases.)

That said, Zelnick was pretty bearish about how much of an impact the streaming business model will really have on Take-Two’s revenue.

“It’s not a game changer,” Zelnick said. “People who want our games now can get our games now. The fact that you can stream them and not have to have a console interface is really not that big of a deal.”

Who exactly is streaming for?

Zelnick then mocked a key concept underlying the entire Stadia business model: the idea that streaming would appeal to billions of potential players clamoring for high-end games on their mobile phones or low-end PCs.

“If you’re going to pay over $60 in US dollars for a front-line release, and more internationally, are you really unwilling to buy a $300 console?” Zelnick mused. “The belief that streaming would be transformative was based on the idea that there were tons of people out there who really… [had] interested in interactive entertainment, really wanted to pay for it but just didn’t want to have a console. I’m not sure if that turned out to be the case.”

If this whole argument sounds familiar, you may remember the fateful microconsole boom of the early and mid-2010s. Back then, a surprising number of hardware makers thought there was a huge market of would-be gamers who were not willing to spend $400 on a high-end console full of marquee releases, but goods willing to spend $100 on a low end console full of indie games.

In the end, the world’s PS4s succeeded, while the world’s Ouyas failed spectacularly.

Stadia and other streaming game services aren’t an exact repeat of the microconsole trend. The platform can handle high-end games, for example, and the hardware entry cost is practically nothing if you already own a smartphone, tablet or laptop (although that wasn’t the case when Stadia launched).

But the streaming business case still rests on the notion that there’s a significant market of gamers who aren’t willing to buy into the console market (or spend money on a gaming PC) to play big titles. In addition, those gamers must be prepared to deal with potential latency and broadband connectivity issues in order to have the privilege of playing. Perhaps streaming works better as a mobile-focused bonus add-on to an existing downloadable game company, and that’s the direction Microsoft seems to be heading with the idea.

“So I’m excited about [streaming] technology and what it can do,” Zelnick summed up in his conference interview. “But I don’t believe it will multiply our market by 10 or 20 times. And if so, that would be great. I’d like to be wrong.”

List image by Kyle Orlando

By akfire1

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