Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains dives into what we know about Google parent Alphabet Inc.’s (GOOGL - Free Report) foray into cloud gaming with Stadia. Then we break down Microsoft’s (MSFT - Free Report) gaming future and discuss the massive video game industry as a whole to see which company might come out on top.
Microsoft stock has soared 30% in 2019 to help it once again become the world’s mostly valuable public company, with a market cap of just over $1 trillion, which is more than Apple (AAPL - Free Report) and Amazon (AMZN - Free Report) . Meanwhile, shares of GOOGL are up just around 4% this year as fears grow that U.S. government regulators might crackdown on the tech giant and Facebook (FB - Free Report) over their outsized control over the spread of information.
With that said, Google looks poised to expand its business and recently outlined some of its plans for its new cloud-based gaming service called Stadia. The search engine giant said that players will be able to play games across smartphones, tablets, laptops, TVs, and more. Google’s Stadia is set to launch in November on a more limited basis, with its Founder's Edition, which will cost $129. The streaming gaming service promises to let users “instantly enjoy games in up to 4K on your TV without a console. You can also play across laptops, desktops, Pixel 3, and Pixel 3a with cross-screen early access starting from day one.”
Stadia has been referred to as the Netflix (NFLX - Free Report) of video gaming. But it is not as simple as that, and both Wall Street analysts and some of the gaming community seem somewhat skeptical about Google’s cloud gaming plans.
Meanwhile, Microsoft also recently detailed its near-term gaming future. The firm is set to begin testing its new video game-streaming initiative in October. MSFT’s Project xCloud will allow users to play games without the direct use of consoles. But cloud-based streaming gaming is still in the very early days and Microsoft has set its expectations with this fact in mind as speed and connectivity prove a challenge.
On top of that, Microsoft detailed its next-generation Xbox dubbed Project Scarlett that is set to feature an AMD (AMD - Free Report) chip. The tech titan has also partnered with industry rival Sony (SNE - Free Report) on the PlayStation maker’s own cloud gaming future. In the end, both Google and Microsoft hope to profit from the nascent cloud gaming age. Yet it seems that one company might have the upper hand at the moment.
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