How much will a Google Stadia subscription cost?

The press wonders how much the Google Stadia cloud gaming service will cost. The publication Wired suggests a price of 10-15 pounds ($ 13-20) by analogy with the cost of Netflix, and in this article, Egor Guryev , CEO and founder of the Playkey cloud gaming platform , will figure out how realistic this scenario is. We give him the floor.



For many years we have been working in the field of cloud games and we perfectly understand the whole pricing of this business. From the point of view of mathematics, everything is quite simple: there is a cost of a gaming slot, there is an understandable percentage for leasing. Here's what the model looks like:

Game slot cost:	$ 3,000 (GTX 1080ti + memory + dedicated cores from the CPU)
Leasing cost:	15% per annum
Lease term:	3 years
The cost of hardware, including leasing:	about 104 $ per month
The cost of placing a gaming slot in a data center:	60 $ per month
Utilization of playing time:	about 50% (360 hours per month)
Cost of playing hours:	$ 0.45
Total cost:	$ 160 per month for one gaming slot (enough for about 10 users)

nb: utilization of 50% of game time is a necessary measure for any project in cloud gaming. US players will not be able to “retake” the night hours of downtime for European servers, because they will have too high ping.

With this model, the subscription cost in the region of $ 15 / month. Allows you to only beat off the cost of gaming hardware "to zero." This does not work to fit either payroll or the cost of attracting customers, and even more so - no royalties to game publishers. That is, in theory, such a model is possible at the start as a project promotion campaign, but it certainly does not look like a healthy business.

True, there is an important “but”: this calculation is true for many, but not for Google. They play by their own rules and can create exclusive conditions for themselves: at the cost of hardware for servers, at the cost of their maintenance, or at the price of attracting users.
Yes, in the end, Google can earn not on the cost of playing time, but on advertising or user data.

Will games be included in the subscription?

There have never been any business models of cloud gaming, in which top-end gaming innovations are already included in the subscription price. And if Google can implement this and agree with the copyright holders, then they will be an absolute innovator.

Do I believe in such a scenario? Definitely not. Unlike cinema, the passage of games can drag on for weeks and months, and no one will risk releasing a novelty “in subscription” with other titles earlier than in six months or a year. Therefore, I do not think that the model will even repeat the film format even in the long run, when the digital version can be delayed only 2-3 months after the premiere.

The logic of the copyright holders is simple: they have the expected sales volumes, and they will fight to the last so that these expectations are met. In the case of working on a subscription model, I see only the opportunity for the site to pay a fixed (obviously huge) royalty to the copyright holder, so that on the day of launch he gives the top title for per-minute lease.

Rightholders are well aware that there are not many players who pass titles to the end. This can be seen even on Steam achievements: only 10-20% of players receive “final” achievements. With a per-minute lease, these 10% will be the only ones who pay the full cost of the game (or even overpay).

What are the chances of the other players?

I’m sure that no matter how perfect Google’s solution is, users will always look in the direction of competitors and their chips. It's even easier with Russia: in our market, the policy of IT giants like Yandex and Mail.ru is such that they will not allow Google to easily capture the cloud games market. Most likely, they will either create their services “from scratch” or buy one of the current players, and Google will only help them pump knowledge among the players about such an opportunity - to play in the cloud. A service such as cloud games requires serious localization: in Russia, servers will have to be installed not only in Moscow and St. Petersburg, but throughout the whole country. This level of coverage will require hyperlocalization, and it is easier to get it with a ready-made cloud infrastructure - which, of course, is already available at Mail.ru and Yandex.

What else solution is possible? It seems to me that the copyright holders and publishers themselves will try to repel Google. And they will either start creating their own cloud gaming platforms, or use SaaS solutions. In order to offer players to play in the cloud on their servers, in the regions they need, but on their own terms. And in such a B2B model, let the SaaS provider provide the quality of service. We are also looking in this direction, and recently presented our B2B project - just aimed at publishers and game developers who would not like to create their own software for cloud games, but who are interested in the SaaS model.