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How Stadia Ties in with Google’s Cloud Business

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Apr. 2 2019, Published 10:00 a.m. ET

Cloud market presents a $206 billion revenue opportunity

In addition to giving Google (GOOGL) a foothold in the video game market, which is forecast to hit $174 billion by 2021, the Stadia gaming platform Google has built could help it capture more cloud computing dollars. According to Gartner estimates, $206.2 billion is up for grabs in the global public cloud services market this year, with the market forecast to grow to $278.3 billion by 2021.

The global cloud market is currently dominated by Amazon (AMZN) and Microsoft (MSFT), which exited the fourth quarter commanding 35% and 15% of the cloud market, respectively, according to Synergy Research estimates. Google held a ~7.0% share of the cloud market at the end of the fourth quarter, tying for third place with IBM (IBM). Alibaba (BABA) held roughly 5.0% of the global cloud market in the fourth quarter.

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No need for downloads or expensive gaming devices

Stadia is a cloud-based gaming platform. It’s designed to improve the gaming experience in that gamers won’t need to download games or purchase hardware to be able to run high-end games.

With Stadia, Google can be seen trying to woo video game developers and publishers to its cloud platform with the promise of eliminating the barriers to the uptake of their products. For example, when people don’t have to purchase expensive gaming hardware, they may spend more on game content purchases, thereby generating more revenue for game publishers.

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