InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Alphabet's (NASDAQ: GOOG , NASDAQ: GOOGL ) Google division took the wraps off its streaming gaming platform at a GDC 2019 keynote on Tuesday. Formerly known by the code names Project Stream and Project Yeti, the new game service is called Stadia, and it will launch later in 2019. While Alphabet stock was up a percent or so, the big winners appear to be companies that will be needed to support Stadia. Game developer Activision Blizzard (NASDAQ: ATVI ) notched a 3.22% boost, while chip maker Advanced Micro Devices (NASDAQ: AMD ) shot up nearly 12% after the announcement.
Stadia has the potential to be a game changer (no pun intended) but the real winners in the short term are going to be the companies that Google needs to lean on to make its game streaming platform happen.
Googles Announces Stadia "The Future of Gaming"
Leading up to yesterday's Game Developer Conference keynote, we had a pretty good idea of what Google was up to . After all, the company had publicly trialled the experience of playing AAA video games in a browser with its Project Stream , which wrapped up earlier this year.
Google's keynote was all about what it has been describing as "the future of gaming," which now has a name and a launch timeframe . Stadia is the official name of Google's new game streaming platform, and the company says it will launch later in 2019 in the U.S., Canada and Europe.
Stadia will let players stream video games over the internet to devices running the Chrome web browser, through a Google Chromecast or to a Google Pixel device. No console or gaming PC is required, which would cut costs considerably for players. The company is also releasing a Stadia game controller that links to the service directly over Wi-Fi, and has buttons dedicated to YouTube and Google Assistant. Speaking of Youtube, Google says you'll be able to watch gameplay on its popular video-sharing service, push a button and instantly be able to play the video game.
Stadia will r equire a 25Mbps internet connection and promises 4K resolution at 60fps, with plans to eventually offer up to 8K resolution and up to 120fps.
The global video game industry was worth $138 billion last year , and it's growing. If Stadia can grab a chunk of that, there is a real payoff for Google, which is why Alphabet stock nudged up 1.17% on the announcement.
There is also the potential for game developers to sell to a wider audience, and Google says over 100 game studios already have Stadia development kits. Some game development companies got a serious boost from the Stadia announcement, including Activision Blizzard. Ubisoft Entertainment (OTCMKTS: UBSFY ) - the publisher of Assassin's Creed Odyssey, which was the game tested with Project Stream - also saw a 2.99% bump.
The big winner for now though is AMD. To launch Stadia, Google says it is investing in custom GPUs from AMD for its data centers. That's a big, exclusive hardware sale with the potential to keep going well beyond the launch.
While some game developer stocks saw a boost from Google's announcement, there is also uncertainty in the industry. Google is creating its own game studio to release Stadia-exclusive titles and that means competition. Developing for yet another platform means additional costs. Some video game console makers also took a hit. Microsoft (NASDAQ: MSFT ) held steady, but Sony (NYSE: SNE ) and Nintendo (OTCMKTS: NTDOY ) both closed down over 3%. GameStop (NYSE: GME ) has a lot to lose if gaming ditches physical discs for streaming, and it took a 0.99% hit on the day.
What was missing from Google's Stadia announcement? Besides Doom Eternal - which will also be available for PC, Xbox One and Nintendo Switch - details on launch titles were thin. Also missing was the cost. We're assuming Google will charge a monthly subscription fee for access to Stadia, and that the optional controller would be sold separately, but there has been no confirmation.
What we know now is that Google is angling for a larger cut of the $138 billion video game industry, in a big move that may have significant upside for Alphabet stock. In the meantime, Stadia partners like AMD are reaping the benefits as Google spends to build out the service, while console makers and game sellers watch to see if their business faces a real threat.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securitie s.
More From InvestorPlaceCompare Brokers
The post AMD Stock Rockets on Google Stadia Announcement appeared first on InvestorPlace .