Google (NASDAQ: GOOGL) announced this week that it is shuttering its game streaming service Stadia early next year, giving subscribers access to the games library through Jan. 18. After that, the service will be shut down for good.
The digital gaming service, which launched in 2019, "hasn't gained the traction with users," that Google expected, wrote Phil Harrison, vice president and general manager of Stadia, in a blogpost. "We've made the difficult decision to begin winding down our Stadia streaming service."
For many Stadia users, this announcement came without warning, as Google has not previously disclosed internal issues with the streaming service. Back in July, the company wrote in a Twitter (NYSE: TWTR) reply: "Stadia is not shutting down. Rest assured we're always working on bringing more great games to the platform and Stadia Pro."
However, it seems there was some underlying financial issues with the platform for years. Last year, Google ended the Stadia Games and Entertainment team, which was created to develop original games for the service.
While it may be a surprise, the end of Stadia correlates with CEO Sundar Pichai's plan announced earlier this month to make the company 20% more productive. These efforts include product and headcount cuts, according to Pichai, as the company is met with macroeconomic headwinds and slowing growth.
"We want to make sure as a company, when you have fewer resources than before, you are prioritizing all the right things to be working on and your employees are really productive that they can actually have impact on the things they're working on so that's what we are spending our time on," Pichai said at Code Conference in Los Angeles on Sept. 6.
Google said it will be refunding all Stadia hardware purchases made through the Google Store, as well as all game and add-on content purchases at the Stadia store. The company will turn off all Stadia servers on Jan. 18, and expects to complete the majority of refunds by then.
Despite the shutdown, Google plan to implement its cloud streaming technology for other projects in the future, according to Harrison.
"The underlying technology platform that powers Stadia has been proven at scale and transcends gaming," Harrison wrote. "We see clear opportunities to apply this technology across other parts of Google like YouTube, Google Play, and our Augmented Reality (AR) efforts--as well as make it available to our industry partners, which aligns with where we see the future of gaming headed."
Google also plans to continue to invest in tools and technologies to support gaming in other areas, including gaming apps on its Google Play and Google Play Games platforms.