Google made a big announcement about Stadia in March 2019, promising to revolutionize gaming. At the time, streaming games was hardly a new idea, but Google had the money and muscle to make it happen, not to mention a first-party game studio led by Ubisoft and EA veteran Jade Raymond, Stadia Games and Entertainment, not to mention that there was.

But less than two years later, Stadia's plan to make first-party games fell apart: Google shut down the in-house studio before it could release a game, and Raymond left the company as a result. Stadia will continue to operate as a platform with the same free and subscription-based plans, but Google will "not invest any more" in in-house game development, Stadia boss Phil Harrison said.

A new Wired report investigating the failure of Stadia's in-house studio suggests that this outcome was almost inevitable.

"Google is really an engineering and technology business," Harrison said. Creating content requires a type of role that doesn't typically exist at Google."

From our perspective, Stadia was clearly lacking at launch, and sources told Wired that there were some serious internal problems. Developers were instructed to focus on showcasing Stadia's technology rather than the games themselves, and a hiring freeze was implemented in April 2020, before the new Stadia studio, then in California, was fully staffed. Over time, some aspects of the process were improved, such as access to development tools and a more game-oriented personnel review process, but the headcount never grew further.

Despite these obstacles, Harrison said in late January that Stadia Games and Entertainment had made significant progress in "building a diverse and talented team and establishing a strong lineup of Stadia exclusive games." However, as reported earlier this month, the company pulled the plug on all of that just five days later.

The report notes that Google's Stadia experience is similar in many ways to that of Amazon, another company that failed in the video game business despite having virtually unlimited resources to devote, and two sources say that Google would have been better served by Microsoft's two sources say that Google should have copied Microsoft's approach: buy a studio, fund it, and leave it alone.

"We thought the only way this could work was if Google accepted that we were going to take it in stages. If Google is really interested in making a place for themselves in this market, they're willing to lose money first to establish themselves."

The full report on the demise of Stadia Games and Entertainment goes into considerable detail on this issue.