Google Stadia is set to shut down in a matter of months after barely three years of availability. “What went wrong” is a complex question, but it seems Xbox’s Phil Spencer has an opinion on why Stadia didn’t succeed in the same way Xbox Cloud Gaming has, and, as someone who loved Stadia, I’ve got to say he’s dead on.

In an interview during the Wall Street Journal Tech Live event this week, Phil Spencer laid out a look at the future of Xbox gaming through his responses, as well as offering some tidbits including the decision to shelve the cloud gaming-dedicated device known as “Keystone.”

Spencer was also asked about cloud gaming as a business model. WSJ reporter Sarah Needleman asked the Xbox chief if the market is actually ready for cloud gaming following Google’s decision to shutter Stadia, and what Xbox is doing to succeed in cloud gaming where Google couldn’t.

In response to Stadia’s closure and what Xbox is doing differently, Spencer explained that Microsoft views Xbox Cloud Gaming as “an option” as the company encourages choice for players. He reasons that Microsoft’s approach to cloud gaming has been “customer-driven” and acts as a way to allow customers to play their games on devices that otherwise might not be able to play console-quality games rather than the “either/or” approach that Google Stadia and other cloud gaming platforms, like Amazon Luna, have taken.

Our approach has been to give our customers a choice in how they play. We haven’t gone out and tried to tell people that they should not play on their PC or they should not play on their phone or their gaming console.

We look at cloud as an option for people maybe when they’re away from their console or PC or they’re on a device like [a] tablet… and they want to play a game. [A] tablet’s not going to run most console games, so we’re able to stream to that device. And the other people have gone out and tried to make it a real either/or choice. You’re either playing and streaming or you’re not. We’ve taken a more customer-driven focus. We have a subscription, you can buy games, if you subscribe you able to stream those games to any device with a web browser. Giving the customer the choice, putting the customer at the center of our decision-making has led to more success for us and I think we just announced we crossed 20 million people who have tried our cloud streaming.

It’s early, I don’t have a vision where everybody’s on cloud, nobody’s buying a piece of hardware. I don’t think that’s the future, but giving customers choice we found is good business.

You can view the full interview here, with talk of Stadia and cloud gaming coming in around the 12:30 mark.

Around the time of Stadia’s launch, Phil Spencer said that Google was the “real” competition for Xbox, and at the time he was referring to the free version of the platform that Xbox still doesn’t offer.

9to5Google’s Take

As someone who invested quite heavily in Stadia and spent quite a bit of time playing on the platform, I have to say I fully agree with Spencer on this point.

Stadia was a brilliant idea in theory, a platform that followed you virtually anywhere you went and forgoes some of the limitations that traditional consoles such as downloads, waiting on updates, and just the physical size and power consumption of a console or PC. They were all points that sold me on Stadia.

But it’s abundantly clear that a cloud-only platform isn’t ready just yet, for a number of reasons.

Spencer’s comments about not seeing a time where “everybody’s on cloud, nobody’s buying a piece of hardware” is dead on. I can’t count the number of times where I opted not to play on Stadia because my ISP was acting up or I was having other network issues. Heck, I couldn’t play any cloud gaming services reliably for the better part of six months because of ongoing issues with my network.

In those cases, still owning a powerful gaming PC allowed me to keep playing my games when my network made Stadia impossible. And, really, I’d have loved to be able to locally download the games I was playing on Stadia during those times.

With Xbox’s approach, that’s exactly what you get.

Cloud when you want it and all of the benefits that provides, but local play on a PC or a console when you want that. While some of Google’s cloud-only features were impressive and the promises that a cloud-only platform could provide remain enticing, they just aren’t feasible for everyone yet. I’m not the only person to have network or ISP hiccups that are out of my control, and that makes cloud gaming tough. And besides that, Google never actually capitalized on those benefits anyway!

Stadia had the tech right, but Xbox’s approach really seems to understand where players are and what they want today in a way that Google could never have replicated.

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Ben Schoon

Ben is a writer and video producer for 9to5Google.

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