Here’s Some Good News for Google’s Stadia Business

American youth ditching television for gaming services

Google (GOOGL) is gearing up to launch its Stadia game subscription service at a time when demand for game subscription services is soaring among American youth. According to a Deloitte survey cited by Reuters, about 53% of Americans born between 1983 and 1999 now pay for a gaming service, which compares to 51% who pay for television subscriptions. Facebook (FB) and Snap (SNAP) have also introduced gaming services in their social apps in an attempt to capitalize on the growing demand for digital gaming services.

Here’s Some Good News for Google’s Stadia Business

The rise of the gaming subscription market appears to be coming at the expense of the traditional pay-TV market. A Deloitte survey released last year showed that 44% of American youth paid for a gaming service compared to 52% who paid for a television service. That shows that the upcoming Stadia game subscription service will open another avenue for Google to ride the cord-cutting wave. The company is already capitalizing on cord-cutting with its YouTube TV and YouTube Premium video services.

One company’s crisis is another company’s opportunity

The number of American adults who have dropped pay-TV subscriptions reached 33 million in 2018, according to data from eMarketer. The number is forecast to swell to 55 million by 2022, which signals an expanding market opportunity for Google services such as Stadia and YouTube.

But for traditional media companies, cord-cutting is causing pain. AT&T (T), Dish Network (DISH), and Comcast shed 627,000, 259,000, and 121,000 pay-TV subscribers in the first quarter, respectively.