On the first day of February, Google announced that it was closing down its in-house SG&E (Stadia Games & Entertainment) Studios. Google intended to create video games exclusive to its Stadia cloud-gaming service that would showcase the platform’s capabilities. As reported by Kotaku, none of the employees saw it coming. They were, in fact, notified the same day that Google publicly announced the studio’s closures.
In addition to receiving the news at the last minute, employees of the studio were praised for their work just the week before. According to ‘four sources with knowledge of what transpired’ Google Stadia’s VP and GM Phil Harrison emailed the staff, praising them for the “great progress” made thus far.
[Stadia Games and Entertainment] has made great progress building a diverse and talented team and establishing a strong lineup of Stadia exclusive games […] We will confirm the SG&E investment envelope shortly, which will, in turn, inform the SG&E strategy and 2021 [objectives and key results].” – from Harrison’s January 27 email
It was only a few days after the email that Harrison announced in that blog post that Jade Raymond left the company and the event resulted in Google’s decision to cease investment in SG&E. Google had built strong teams in LA and Montreal studios, signaling it was willing to go all the way with in-house games.
Developers didn’t get to speak to Harrison until a conference call three days after the announcement of SG&E’s closure. Harrison expressed that he knew about the Studio’s fate when the email was sent and expressed regret for his misleading statements to his team. A source to Kotaku revealed the Q&A after that conference call “wasn’t pretty”.
According to sources, Harrison revealed during the Q&A that Google’s decision was influenced by Microsoft’s “buying spree” and planned acquisition of Bethesda Software. In the February 1 blog post, Harrison also noted “significant investment” and that the “cost is going up exponentially”. It was also revealed during the Q&A that Covid-19 took partial blame for the decision.
Others suggest that Stadia’s management was not strong. “This included a severe lack of resources, difficulty securing necessary hardware and software, and a frozen headcount throughout 2020.” Google didn’t seem to trust that its PG&E Studios would ever be profitable, so it didn’t even give its team the opportunity to try.