Google Stadia shut down last month after merely three years of availability, and following its closure, the CEO of TakeTwo commented on Stadia’s business model as part of the reason it shut down while also questioning the validity of cloud gaming’s future to some extent.

TakeTwo Interactive is the publisher of some of the most popular games available today, including the 2K Sports franchise, Borderlands, Grand Theft Auto, and Red Dead Redemption.

It’s a publisher that was an early partner of Google Stadia, bringing some of those titles to the platform throughout its life, but also a publisher that backed away from Stadia relatively quickly when things started going downhill. NBA 2K, for instance, left Stadia with 2K21 as the final installment released on the platform and left the game broken for months on end, without any fixes or content updates.

In its latest earnings call, TakeTwo Interactive CEO Strauss Zelnick said that cloud gaming was a “distribution technology” and “not a business model.” Zelnick said that broader distribution is “always a good thing” but criticized Stadia’s business model, adding that Stadia “found out” that gamers who are “prepared to pay $60-$70 for a frontline title [are] also prepared to buy a console.” The clip below cuts off a little early, but Zelnick suggests that Stadia’s goodbye and TakeTwo’s loss of being able to sell games to players without a console “will probably have an effect around the edges,” referring to TakeTwo’s financials.

Zelnick’s comments certainly aren’t optimistic about cloud gaming, but do roughly align with that of Xbox’s Phil Spencer, who similarly (though a bit more politely) criticized Google’s business model of charging customers for games to play solely in the cloud. Spencer instead pointed to Xbox Game Pass’ model of offering players the chance to stream games from the cloud and play them locally with its subscription-based library.

Clearly, there is some truth to these sentiments. The view that Stadia would be the “Netflix of gaming” in its earlier days put a wrong idea in the minds of many potential players, many of which were against the idea of paying full price for games they could only play on the cloud. Ultimately, it probably was a large contributing factor to Stadia’s eventual death. Then again, it’s not like every service that offers a subscription-based library thrives.

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Ben Schoon

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