Google will stop making video games, less than two years after launching its highly publicized Stadia gaming platform.
The company is shutting down Stadia Games and Entertainment (SG&E), its internal game development service, Phil Harrison, Stadia’s vice president and GM, announced in a blog post-Monday.
“Creating best-in-class games from the ground up takes many years and significant investment, and the cost is going up exponentially,” Harrison said. He added that the focus will now be on working with external developers to make their games available on Stadia.
“Over the coming months, most of the SG&E team will be moving on to new roles,” he said.
Jade Raymond, the executive in charge of SG&E who previously worked at Sony (SNE), Electronic Arts (EA) and Ubisoft (UBSFF), will leave Google (GOOG) to “pursue other opportunities,” Harrison added.
Games released by the unit in collaboration with Google’s partners include “Gilt”, “Outcasts” and “Submerged: Hidden Depths.” Stadia had also created studios to develop games in-house that will now be shut down. Google did not comment on how many employees will be impacted by the closure.
But developing games from scratch appears to be too heavy a lift (with not enough return) for even these companies with virtually unlimited resources.
“Big Tech sucks at gaming, it’s just not in their DNA,” said Joost van Dreunen, a lecturer at the NYU Stern School of Business and author of the book “One Up Creativity, Competition, and the Global Business of Video Games.”
“Google just hasn’t found the proof points in the last 18 months that would justify continuing down this costly track,” he added. “It makes no sense for them to chase a losing hand.”
