Microsoft’s Acquisition of Bethesda Was Partially Responsible for Stadia’s Closure of First Party Development

Google dropped the bombshell recently that they would be shutting down all first party development of games at their Stadia studios, and will instead be focusing on the service as a platform for third party releases going forward. Though Google’s propensity for cut-and-run antics in the past doesn’t make this awfully surprising, it’s still been a major update, especially for those who were working at Stadia’s studios and were under the assumption that they’d be given at least a few years and proper backing to actually start putting out new content for Google’s service.

As per a new report from Kotaku, it doesn’t look like Google handled the whole process well at all internally either. On January 27, just a few days before the announcement of the shuttering of first party studios (which was followed by widespread layoffs), Google Stadia vice president and general manager Phil Harrison sent a company-wide email to employees praising the “great progress” made, and indicating that Google would continue to make investments.

“[Stadia Games and Entertainment] has made great progress building a diverse and talented team and establishing a strong lineup of Stadia exclusive games,” the email read. “We will confirm the SG&E investment envelope shortly, which will, in turn, inform the SG&E strategy and 2021 [objectives and key results].”

In a Q&A session a few days after the aforementioned announcement, Harrison told Stadia employees that leadership had known about the decision to shut down first party studios even at the time that the email was sent out. As you can imagine, people who lost their jobs were not happy.

Meanwhile, Harrison also provided a few reasons for why the decision was made, though it doesn’t seem like he went into an awful amount of detail. Interestingly enough, Microsoft’s acquisition of Bethesda was given as one of the key reasons for the same. Though more details aren’t provided in the Kotaku report, given the fact that Microsoft and Google stand as two of the core competitors in the cloud-service space, it stands to reason that such a major publisher acquisition would cause Google to question whether they’re prepared to match those kinds of investments to remain competitive.

The ever-increasing costs of video game development were also mentioned as a factor- though it’s hard to imagine why that would be something Google wouldn’t have considered beforehand. Surely, they would have been well aware of the required costs and investments before they established an entirely new business for themselves. Finally, the hurdles brought about by the COVID-19 pandemic also presented their own challenges.

As mentioned earlier, though first party development has no future at Google anymore, Stadia is still scheduled to receive third party support for the foreseeable future. Over 100 games are supposedly scheduled for launch in 2021, including the likes of FIFA 21, Judgment, Outriders, and more.