Answer the following questions: 1- Discuss and justify the value proposition of Stadia and its positioning (cost and image) relative to competition. 2- Apply the three tests of a Winning strategy (Chapter 8) to discuss whether the strategy is a good one for Google. How may the business model of Stadia disrupt the market? Based on your analysis, discuss whether you agree with the author of the case, when he states “Paying for a games console, and its games, may not be such a bad thing after all!”3- Discuss the sources that Google may tap to improve the Innovation. Discuss the ethical considerations in launching Stadia by Google for the different firms in the gaming industry. please see the guidelines attached and notice the highlighted notes.
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Exam Rules/Instructions to learners:
1. This is an individual Assignment worth 50%. You should NOT seek or obtain any
outside assistance from anybody.
3. The report writing should take you about 3-5 hours. I advise you to plan and organize
your time in advance.
4. Marks will be awarded for critical analysis and creative thinking and for justifying
your responses logically using theoretical concepts you learnt in the course.
5. Reference ALL your sources using Harvard system of Referencing
6. Use your own words in answering the questions. The assignment will be submitted
7. Maximum word length including cover page, references, annexes and other
information is 1200 words. There will be a penalty of 1 mark for every 50 words
above the word limit. Therefore, write concisely in conveying your ideas and
arguments. Maximum file size will be set at 1 MB.
9. All learners are expected to be present in final class on Sunday 12 May 2019 for a
viva voce on their submission.
RELAX, GOOD LUCK, AND ENJOY THE LEARNING EXPERIENCE!
Read the case below and answer the following questions.
Google Stadia gaming platform
Traditionally video games were either downloaded by gamers or purchased on disc. A recent
innovation by Google would change this approach. In March 2019, Google unveiled a new
digital gaming platform called Stadia that will stream better quality games than those available
through consoles. Stadia will work on existing desktops, laptops, TVs and phones. Google also
revealed a controller, that looks like a traditional console gamepad. However, the Stadia version
has a button for capturing and sharing gaming directly to YouTube.
One of the first games available will be the famous title Doom Eternal. Google considers that the
future of the games industry lies in streaming, and that its technology will make streaming games
possible even pleasurable. The question that arises is: Will Google again come up with a
business model that will disrupt the industry?
Implications of game streaming for various stakeholders
Games consoles and games are expensive. Microsoft Xbox 360 e 500GB and FIFA 19 are priced
at AED 1300 and AED 155 respectively at souq.com. Google’s Stadia could eliminate both
costs, replacing them with a subscription fee. An approximate figure might be AED 50-100 a
month – although some major game titles might include an additional fee on top.
For gamers however, there are a number of hurdles to overcome. Google stated that its tests
managed 4K gaming on download speeds of ‘around 25mbps’. For comparison, Microsoft
suggests a minimum of only 3mbps to play traditional games online. To upgrade from 3mbps to
25mbps, gamers would need to pay several hundred Dirhams a year to their internet service
provider to upgrade their internet speed. Google predicts the technology will improve so as to
allow play at lower speeds, but that is not a certainty.
The big fear will be in succumbing to what has happened to the music industry. Streaming has
meant royalty payments have been squeezed so dramatically, even elite musicians can struggle to
make a living through record sales. Similarly, in the TV/movie business, the deep pockets of
Netflix have meant studios seem more flush than ever, but you wonder how long that can
continue. The AED 15bn Netflix is planning to spend on new content this year is considered by
most investors to be unsustainable.
However, for Google it is undoubtedly a good move. Without gaming platforms, there is little to
lose and everything to gain. Google sees YouTube, where billions of hours of gaming have been
uploaded, as just one half of a very lucrative puzzle. Stadia (it hopes) will make up the rest.
A bigger question, though, might be how the games themselves may have to change in order to
accommodate a new business model if streaming becomes the dominant way consumers access
their games. It might leave publishers deprived of a huge income stream, instead fighting with
the rest of the industry for a percentage of those AED 50-100 per month.
For big publishers, massive reach, and exclusivity deals, might make the numbers just about add
up. And for tiny independent developers, with one or two people, that might work well: a huge
audience a click away. However, the model shows signs it could leave a very exposed middle
ground of medium-sized games makers, whose costs are too high to be offset by the amount of
players the title will attract. With many of the most creative ideas coming via these agile and
powerful mid-size studios, a tougher business model might have a negative impact on their
profitability and sustainability.
Now, the wild success and profitability of free-to-play Fortnite game, which offers cosmetic
upgrades for a fee, shows games makers can make astronomical amounts of money without an
upfront cost or overly-intrusive in-game monetization. But how many Fortnite-like successes can
the market sustain? Probably only a few at best.
If it does indeed go for a subscription model, Google has some important decisions to make
about how will dish money out to publishers. On YouTube, one of the stats that determines how
much ad revenue creators get is ‘minutes watched’. In gaming, “minutes played” could lead to
some developers introducing gameplay mechanics that are counter-intuitive to a good time, but
vital if they are to gain income. Or, developers might have to make up the loss of funds by
encouraging players to pay for additional items to progress more quickly, in a far more
aggressive manner than console gamers are used to today.
The ad-laden, endorphin-pumping mobile gaming industry might be considered the canary in a
coal-mine1, here. Paying for a games console, and its games, may not be such a bad thing after
Source: Adapted from: Dave Lee, BBC News, 20 March 2019.
1 A canary in a coal mine is an advanced warning of some danger. The metaphor originates from the times when miners used to
carry caged canaries while at work; if there was any methane or carbon monoxide in the mine, the canary would die before the
levels of the gas reached those hazardous to humans (https://english.stackexchange.com/questions/102939/what-is-a-canary-in-a-coal-mine).
(Total=50 marks; Maximum length=1200 words)
Maysoon is back from her holidays in Europe. She visits you at home to share a copy of the
above case, which she found it very interesting. She looks up to you, her elder cousin, as an
expert in Innovation, and she seeks your help to analyze the Innovation Strategy of Google. You
smile at her interest and agree to prepare a report for her.
In the report, you will analyze the Innovation strategy of Google for Stadia service, with regard
to the following 3 key issues:
Discuss and justify the value proposition of Stadia and its positioning (cost and
image) relative to competition.
Apply the three tests of a Winning strategy (Chapter 8) to discuss whether the
strategy is a good one for Google. How may the business model of Stadia disrupt the
market? Based on your analysis, discuss whether you agree with the author of the
case, when he states “Paying for a games console, and its games, may not be such a
bad thing after all!”
Discuss the sources that Google may tap to improve the Innovation. Discuss the
ethical considerations in launching Stadia by Google for the different firms in the
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