Google Jumps Into The Game Revenue Split Wars With Stadia

from the splitsville dept

It's no secret that the launch of Google's video game streaming platform Stadia has not exactly been smooth. From access issues to performance problems, up to and including a low adoption rate and stunted catalogue of games, this appeared for all the world to be Google's video game equivalent of Google Plus. In other words, one of those projects Google launches half way and then abandons. Part of the issue with the catalogue was reports that Google wasn't going to be shelling out cash to bring in more games to the platform last year.

But perhaps that is going to change. And perhaps the rumors of Stadia's forthcoming death have been greatly exaggerated. Reports now indicate that Google is going to try to attract more publishers to the platform by engaging in the same revenue-split wars currently going on between Steam, Epic, and Microsoft.

As part of a Stadia keynote presentation today, Google announced several moves designed to attract more games and publishers to its streaming gaming service. Chief among these is a more generous revenue split for publishers on the platform. Starting in October, Google will only take a 15 percent cut of the first $3 million in revenue for each new game on Stadia.

Assuming the industry-standard 30 percent cut, that means publishers stand to make up to $450,000 more per game before Google's cut reverts back to the standard at the $3 million threshold (a Google representative told Ars that "Stadia currently provides competitive revenue share terms with partners that matches what they typically see from other industry platforms"). The more generous deal only applies to "newly signed games" on Stadia from October through the end of 2023, though, meaning publishers that got in on Stadia early will miss out on the increase for their legacy titles.

As noted, this program is specifically designed to attract new game titles to Stadia. It's also worth noting that the "industry-standard 30%" platform cut isn't necessarily the industry standard any longer, unless you only consider Steam as the standard. And that would be dumb. There is emerging competition in the gaming storefront space... finally.

But, for Stadia, this is less about trying to carve out more market share and more about carving out any market share. Stadia only has 195 games on its platform. And while that might sound like a healthy amount, it's really not. Not when you consider the thousands of games available on Steam and Epic, or even the hundreds of games you can buy for last-generation consoles. Yes, streaming is different and not all games will be good candidates for the streaming platform. But streaming services become attractive largely by volume of offering. Imagine Netflix never getting past 200 television shows and movies. It wouldn't work.

Stadia is also trying to lure more games onto the platform with other revenue-makers as well.

Google will also more directly be giving publishers a cut of the proceeds from the games Stadia offers as freebies through its $10/month Stadia Pro subscription. A full 70 percent of Stadia Pro revenue will now be shared with the publishers of "any new title that enters into Stadia Pro" starting this month. That revenue will be divided up among publishers based on the number of "session days" (i.e., daily active users per day) logged on each title among all Stadia Pro users.

Finally, Google says that it will be rolling out a new Affiliate Marketing Program to increase the value of the "Click to Play" links that Stadia developers and publishers can create. Starting sometime in early 2022, if a player signs up for Stadia Pro using one of those instant-play links, the developer or publisher behind the link will receive the first $10 monthly payment made on the subscription (after a one-month free trial).

All of which is to denote that it looks like Google isn't ready to give up on Stadia yet. But getting more games on Stadia is just the first step. Even if that's successful, Google then has to gain more customer adoption. That's going to take time and investment over the mid- to long-term.

And after the rocky start, we'll get to find out together whether more games will be enough to get the bad Stadia taste out of the public's mouth.

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Filed Under: revenue split, stadia, video game streaming, video games
Companies: google