Google Stadia is a Net Neutrality Nightmare
At the Game Developers Conference (GDC) this year, Google announced that it has taken up the long and ever-lengthening dream of the video game streaming service. Meant to replace the hefty, pricey, altogether confounding experience of buying and using various gaming hardware, Google Stadia will run video games on Google’s own hardware in a server farm and stream the experience to anything with a screen.
While the internet commentary parade has already made loud the numerous unknowns and uncertainties of Stadia, from pricing to game library to concerns over internet latency and speed requirements, what’s truly disconcerting is the unspoken assumption that forgoing hardware is a net positive for consumers and creators alike. Ultimately, the adult in all of us is sick of having to repurchase video game boxes just to keep up (at least, I am). But if a PC is like a puppy in how it brings you some kind of joy or entertainment, you have to ask yourself one question. Would you rent a puppy?
You sure as heck wouldn’t have to take it to the vet or even feed it all that well to keep it alive. You wouldn’t even have to pay for a replacement leg if the puppy’s bum leg was no longer compatible with its little puppy brain. If you wanted to play a new game on the puppy, you wouldn’t have to worry if there was enough hard drive space left on the puppy to handle the download, patches, or DLCs you would expect the game to have. It’s nice not to have to worry about this kind of stuff. It’s nice not to have to shell out cash ad infinitum to maintain contemporaneousness with an already expensive hobby. Google’s solution is to move all of that worry into their backyard and charge you for it. Seems fair.
But the United States government just recently gave up its ability to prevent internet service providers like Comcast and Verizon from charging different amounts for different types of internet services, placing all legal leverage in the hands of the corporation, such that the whims of your internet consumption pertain ever more to the depth of your wallet. A successful Google Stadia is a prime target in a post-net neutrality world, and the hungry demon between you and Google is the devil itself: Comcast.
Since the FCC rule change undoing net neutrality protections in 2018, the most obvious target for punitive ISP throttling and charging had been something like 4K Netflix streaming, which eats up a significant level of bandwidth and already costs more for the customer to do, in both ISP bandwidth and actual Netflix subscription costs. In that time, in fact, Netflix subscription costs across the board have gone up. In all likelihood, it’s Netflix’s own ISP costs that have gone up as well. Their service provider can choose to charge them more now, and you can bet Google’s own widespread server network, a much-touted advantage of Stadia, is just as vulnerable to targeted pricing in how their servers communicate with our devices at home. The immense uptick in bandwidth caused by a video game streaming service will set off every alarm bell possible. And Google’s own fiber optic ISP, Fiber, never reached the level of ubiquity it needed to circumvent the intervention of the Comcasts of the world. If this sounds like an appeal to protect Google, it’s not. Google will simply offload the financial burden to you through the price of the Stadia service itself, whatever that may be.
The goal will be to make this feel normal through incremental increases, much like Netflix is doing now, as is one of the primary benefits of a service over a product. Pricing is fluid, easily subjected to third-party manipulation, which is in turn fully digestible only by corporations massive enough to eat disruptive changes in cost. And we can go on and on speculating about how the financial burden of running a service is distributed amongst a market’s players, but the bottom line is this: without ownership, the competition of a marketplace is relegated to a shared corporate shadow, where Google and Comcast get to hash out the value of a product before you ever touch it. With the repeal of net neutrality, the telecommunications industry is going to do everything in its power to hike up the price on hot ticket, bandwidth-hungry items like Stadia. This is actually a net gain for Google because it’s one of the few entities in the world that can actually handle the cost of net neutrality. That’s the first barrier to competition in a game streaming world. The second is a little funkier.
In the classic game industry economy, at the level of individual ownership in which we purchase game hardware and commit to it, the consumer is a regular player in the determination of value, in competition itself.
Not only are the big three, Nintendo, Sony, and Microsoft, constantly trying to outsell each other, they commonly disagree on how to do it. This is true competition in an honest marketplace, and the fact that they keep having to convince us to buy more stuff is exactly what forces them to improve the stuff they want to sell. The outsize presence of the consumer is essential to a marketplace’s competitive health. That’s better games, better hardware, new ways to play. In the context of this article, it’s not so much the number of players in a market that matter, as it is the method of that market’s competitive drive. The divorce between the ownership of hardware and ISP dependency, as flimsy as it is today, still serves an incredibly important role: Comcast isn’t dipping in on my video game bill, at least not directly.
What could ultimately result in the full transition from individual ownership to online service in the game industry, were Stadia and perhaps some Xbox and PS4 streaming services fully adopted, is not so much the removal of competition, but the gutting of its usefulness for the consumer. The industry would start to act like a telecom monopoly without looking like it, much like ISPs and mobile service carriers, in what could be called a regional or shared monopoly.
A shared monopoly, as paradoxical as it sounds, is the implicit agreement amongst competitors on how to equally screw the customer, such that the illusion of choice is maintained but the prices remain inflated. Consider two ice cream shops each selling vanilla and chocolate flavors. They compete and force prices down as a result. If one day one shop decided to only sell vanilla, then more than double the price to offset the loss of chocolate sales and the other shop decided to only sell chocolate, and more than double the price too, both shops would be selling one less product but make more money in total. It would be illegal for these shops to have agreed on this arrangement in secret, but if they came to the arrangement implicitly, shrewdly, the only loser is the customer, who’s paying more for either type of ice cream. Not to mention, neither shop is financially motivated to change or improve their product, as that would break their most profitable marketplace dynamic.
You’ve seen this happen in the smartphone market, where Apple and Samsung have essentially formed a shared monopoly through the implicit agreement to only incrementally update phone technology at the highest level and eke out all potential competition as a result. They’re both selling slightly different flavors of ice cream, but they share the total ice cream market as a functional single unit. Lo and behold, a fundamental part of this shared monopoly is the stripping away of ownership. Both companies now, with the help of mobile phone carriers, lend phones instead of selling them. They slice up the loan into smaller chunks on your monthly bill, obfuscating the true price of the object as long as possible. And prices never go down, while the technology stays virtually the same. Almost magically, your phone ceases to function properly at just around the time that you finally fully own it, at which point you loan a new one and put it right back on your monthly bill. That’s not ownership. It’s a service. Oh, and Google wants in on that too, of course. They sell the software, after all.
Your leverage as a consumer and customer is ownership. Owning something means you ultimately decide how and when it’s used, and that you can’t be charged for it again, and again, and again. You’ve never owned an internet in your life, but you have owned a video game. Google is asking you to give that up, too, mostly for convenience, and mostly Google’s.
Were there not a stronger whim in a gamer’s life than the desire to upgrade, Google Stadia might have positioned itself more innocently as secondary to your Xbox or PS4 or beefed up PC. That’s not the case. Google wants to replace your Xbox entirely, and in doing so transfer the means of your entertainment consumption to the indecipherable fluidity of the service economy.
This is the cost of forgoing ownership for comfort. When you hand off the pains of ownership, like the upkeep and upgrade of a puppy, err, computer, to a powerful entity, you also submit your financial destiny to an unyielding and fluid torrent of economic obfuscation, where digital rights go to die as quietly as possible. Video games are already slipping speedily in this direction, as microtransactions and service replace ownership in free to play games, but anything close to widespread adoption of Google Stadia is more than a slip. It’s a message to your ISP that there’s a brand new backdoor to your wallet.
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