On the first day of February, Google announced the closure of its internal SG&E studios (Stadia Games & Entertainment). Google intended to create video games exclusive to its Stadia cloud gaming service that would showcase the capabilities of the platform. As reported by Kotaku, none of the employees saw it coming. In fact, they were informed the same day that Google publicly announced the studio was shutting down.
In addition to receiving the news at the last minute, the studio employees were praised for their work the week before. According to “four sources with knowledge of what happened,” Google Stadia vice president and general manager Phil Harrison emailed staff, congratulating them on the “great strides” made so far.
[Stadia Games and Entertainment] has made great strides in building a diverse and talented team and establishing a strong lineup of games exclusive to Stadia […] We will soon confirm the SG&E investment envelope, which, in turn, will inform the SG&E strategy and 2021 [objectives and key results]. – extract from Harrison’s email on January 27
It was only a few days after the email that Harrison announced in this blog post that Jade Raymond had left the company and the event resulted in Google’s decision to halt its investments in SG&E. Google had built strong teams at studios in Los Angeles and Montreal, indicating that it was ready to go all the way with games in-house.
The developers were only able to speak to Harrison on a conference call three days after the SG&E shutdown was announced. Harrison said he was aware of the Studio’s fate when the email was sent and expressed regret for his misleading statements to his team. A source for Kotaku revealed that the questions and answers after that conference call “weren’t pretty.”
According to sources, Harrison revealed in question and answer questions that Google’s decision was influenced by Microsoft’s “buying spree” and the planned acquisition of Bethesda Software. In the February 1 blog post, Harrison also noted “a significant investment” and that “the cost is increasing exponentially.” It was also revealed during questions and answers that Covid-19 was partly responsible for the decision.
Others suggest that Stadia’s leadership was not strong. “This included a serious lack of resources, difficulties securing the necessary hardware and software, and a frozen workforce throughout 2020.” Google didn’t seem convinced that its PG&E studios would ever be profitable, so it didn’t even give its team a chance to try.
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