Stadia Leadership Praised Development Studios For ‘Great Progress’ Just One Week Before Laying Them All Off

Developers at Google’s recently formed game studios were shocked February 1 when they were notified that the studios would be shut down, according to four sources with knowledge of what transpired. Just the week prior, Google Stadia vice president and general manager Phil Harrison sent an email to staff lauding the “great progress” its studios had made so far.

Mass layoffs were announced a few days later, part of an apparent pattern of Stadia leadership not being honest and upfront with the company’s developers, many of which had upended their lives and careers to join the team.

“[Stadia Games and Entertainment] has made great progress building a diverse and talented team and establishing a strong lineup of Stadia exclusive games,” Harrison’s January 27 email read, according to sources. “We will confirm the SG&E investment envelope shortly, which will, in turn, inform the SG&E strategy and 2021 [objectives and key results].”

Google declined to comment.

Five days later, Harrison appeared to reverse course completely, announcing in a public blog post that the head of Stadia Games and Entertainment, Jade Raymond, left the company, and Google would “not be investing further in bringing exclusive content from our internal development team SG&E.”

Stadia developers learned the news, first reported by Kotaku, at almost the same time as everyone else via an internal email and conference call with Harrison. The messy rollout came after an already grueling year working through the pandemic. It was reminiscent of Stadia’s own launch, which appeared rushed and left out many features promoted during the service’s reveal, only to be added months later. In this case, however, Stadia’s own developers were the ones impacted by the botched planning.

Released in November 2019, Stadia initially struggled due to its monetization model and a lack of games. The technology was sound, but as a content platform, it was lacking. Maybe strong first-party games could’ve changed that. Google announced in 2019 the formation of Montreal- and Los Angeles-based game studios as well as the hiring of famous Assassin’s Creed producer and eventual EA Motive Studios general manager Jade Raymond to oversee their development. It seemed like Google was in it of the long haul, up until it wasn’t.

“I am proud of the team we built at Stadia Games and Entertainment and the ground-breaking work on exclusive games for the platform,” Raymond told Kotaku in a statement shortly after the closures were announced. “It was a difficult decision to take on a new opportunity, and I will be forever grateful to this team for everything we learned and achieved together.”

Developers had to wait three days after receiving the news to directly share their confusion and frustration with Harrison in a second conference call on February 4. This call was followed by a contentious Q&A where the Stadia boss was confronted about his email from just the week before which suggested anything but a wholesale shutdown of the studios. Harrison expressed his regret over the misleading statements made in his previous email, according to four sources with knowledge of the call. When asked what changed from the week prior, Harrison admitted nothing had and told those on the call, “We knew.”

One source described the Q&A as an ultimately unsuccessful attempt at extracting some kind of accountability from Stadia management.

“I think people really just wanted the truth of what happened,” said the source. “They just want an explanation from leadership. If you started this studio and hired a hundred or so of these people, no one starts that just for it to go away in a year or so, right? You can’t make a game in that amount of time…We had multi-year reassurance, and now we don’t.”

The source added that the Q&A “wasn’t pretty.”

It’s still not clear exactly why Google decided to abandon the first-party studios it started building up less than two years earlier. In his blog post, Harrison referenced the rising costs of game development as a factor.

“Creating best-in-class games from the ground up takes many years and significant investment, and the cost is going up exponentially,” he wrote.

In his Thursday Q&A with staff, he pointed specifically to Microsoft’s buying spree and planned acquisition of Bethesda Software later this year as one of the factors that had made Google decide to close the book on original game development. Google’s parent company, Alphabet, is a nearly trillion-dollar company and roughly on par with Microsoft when it comes to revenue and profit, according to a 2020 survey by Forbes.

Elsewhere during the Q&A, Harrison seemed to suggest that the ongoing pandemic was partly to blame, according to one source. Covid-19’s effects have been devastating, including nearly half a million deaths in the US alone. But it’s also led many to find relief in gaming as they social distance and boosted the bottom lines of many big gaming companies as a result.

To some, the studio closures and how they were communicated to staff was emblematic of the ways game development at Stadia had been mismanaged, three sources told Kotaku. This included a severe lack of resources, difficulty securing necessary hardware and software, and a frozen headcount throughout 2020 following the start of the pandemic, despite the goal of eventually shipping several original exclusives in the coming years.

As of now, sources said, Google is looking to find work for displaced employees elsewhere in the company. However, it is having trouble doing so as Google traditionally hires generalists, and game development requires a very specialized set of skills.

Developers hoped Stadia’s game studios would survive its issues, if for no other reason than that Google, in theory at least, could afford to burn through hundreds of millions trying to jumpstart a new gaming platform with exclusive content. Instead, it ended up burning through the trust of some of the approximately 150 developers impacted by the abrupt change in direction. Now, remaining Stadia employees have to pick up the pieces while wondering how they can trust leadership and how anybody can trust Stadia.