Google is deprioritising Stadia, as the company focuses on streaming deals

Google is deprioritising its cloud gaming service Stadia, and is instead focusing on securing white-label deals with the likes of Capcom and Bungie.

Sources familiar with the plans told Business Insider that the company’s focus is on securing streaming deals under the label Google Stream.

The new direction sees Google attempting to salvage the technology behind Stadia, which was well received, despite the lacklustre response to Stadia itself. However, the shift towards Google Stream has meant that Stadia has become deprioritised, with a reduced interest in bringing blockbuster third-party titles to the platform.

Instead, the company is focusing on pitching the technology to the likes of Bungie, which was considering a streaming platform of its own. According to people familiar with the discussions, the proposal would have seen Bungie owning the content and control the front-end experience, while Google would power the technology behind it.

Google Stream secured at least one gaming deal, with AT&T. In October, the telecommunications company allowed users to stream Batman: Arkham Knight via their web browser. While Google’s branding did not appear, AT&T confirmed that the game was utilising Stadia’s technology.

According to the report, Google has also discussed a similar deal with Capcom, which would have seen the publisher running game demos on its website.

The company’s new direction has also changed the roles for executives and employees. Phil Harrison, the head of Google’s gaming operations now reports to the company’s head of subscriptions. Additionally, Stadia’s former director for games Jack Buser has moved to Google’s cloud unit, while Teddy Keefe, Stadia’s partnerships manager for the Europe, the Middle East, and Africa region, left the company last month.

Stadia has struggled to hold onto users, according to the report. Executives had set a target of 1 million monthly active users by the end of 2020 – but Stadia fell short by about 25 per cent, according to sources familiar with the conversation.

Stadia is also struggling with the increasing consolidation in the industry, making it harder for the company to secure deals with developers and publishers. According to a former employee, Microsoft’s acquisition of Zenimax Media “scared the crap out of Google executives.”

“We announced our intentions of helping publishers and partners deliver games directly to gamers last year, and have been working toward that,” said Patrick Seybold, a Google spokesperson, speaking to Business Insider. “The first manifestation has been our partnership with AT&T who is offering Batman: Arkham Knight available to their customers for free.

“While we won’t be commenting on any rumors or speculation regarding other industry partners, we are still focused on bringing great games to Stadia in 2022. With 200+ titles currently available, we expect to have another 100+ games added to the platform this year, and currently have 50 games available to claim in Stadia Pro.”