Tech

Google's streaming platform could shake things up at this year's biggest gaming expo

Key Points
  • Google's Stadia platform may turn gamers' attention to streaming at this year's E3 conference.
  • The news could spur Microsoft on to reveal more about its own streaming service, Project xCloud.
  • Sony — which won't attend this year's E3 — partnered with Microsoft on streaming games and media.
Attendees play games on the new Stadia gaming platform at the Google booth at the 2019 GDC Game Developers Conference.
Justin Sullivan | Getty Images News | Getty Images

This year's Electronic Entertainment Expo, or E3, has a new entrant and it is raising eyebrows.

The world's largest get-together for some of the biggest names in gaming is set to stage its latest show next week, but one particular name has taken the gaming world by surprise — Google.

The tech giant first announced it was getting into the gaming business back in March, and it recently unveiled a bunch of new details including pricing and games.

Google's gaming effort doesn't take the form of a console. It's a streaming platform, so instead of having to buy a physical copy or download massive files, people can play games that are run on servers at Google's data centers.

The news could spur Microsoft on to reveal more about its own streaming service, Project xCloud. The company has long been a household name in the E3 lineup, alongside Sony — although interestingly, the latter isn't showing up at this year's event.

"Cloud gaming will be front and center of many discussions at E3 as the industry adapts to the changing business models," Candice Mudrick, head of analysis at industry research group Newzoo, told CNBC by email.

"Microsoft and Google are the main ones to watch for, and Stadia has already released details on its service ahead of E3."

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The ability to jump into a game from a computer or tablet could prove appealing for gamers. At the Stadia demo earlier this year, the company said a player could watch a video of a game on YouTube and click a button that lets gamers play it in as fast as five seconds.

'Disrupt the console gaming ecosystem'

Google said Thursday that the service would cost about $10 per month, while the controller used to play it will cost around $70. It will only come with 30 games from major publishers including Electronic Arts, Warner Bros., 2K and Sega, with just two being Stadia exclusives. It's set to launch in November this year.

A prominent lack of exclusives could be a challenge for the Silicon Valley titan, as Microsoft's E3 lineup is expected to include blockbuster Xbox-only titles including "Halo Infinite" and "Gears 5."

"In our view, Google's service has the potential to disrupt the console gaming ecosystem that has been dominated by Microsoft, Nintendo, and Sony for decades," analysts at Wedbush said in a recent note. However, they added that Stadia's business model and third-party support remained "key question marks."

Following the initial announcement of Google Stadia, Sony announced a partnership with Microsoft that sees the Japanese tech giant using the latter's Azure cloud service for streaming games and media.

Wedbush analysts said the Sony-Microsoft deal was "driven in part" by Google's game streaming service. Microsoft could get the upper hand, though, given Sony has decided not to attend this year's expo.

Michael Patcher, managing director of equity research at Wedbush, told CNBC Sony's decision not to join this year's E3 was a "mistake" as the cost of hosting a press conference at the show is "minor in comparison to the publicity they receive."

Microsoft could, therefore, take the spotlight given its biggest hardware competitor won't grab anywhere near the same level of publicity.

The company is also expected to announce details on its upcoming next-generation console. With Sony skipping 2019's E3, Microsoft could use it as an opportunity to reveal more information on the next Xbox. Sony did, however, announce some new details about the next PlayStation console on Thursday.

Nevertheless, streaming could prove a headline generator at E3 2019. According to Newzoo's Mudrick, this could be Microsoft's opportunity to latch onto the streaming phenomenon.

"Given Stadia's reveal today without "killer app" games that are must-haves for ultimate gamers, there is opportunity for Microsoft to swoop in," she said.