Search for Google news today and two developments headline the latest developments at the internet giant: Gaming and discrimination.
- Google is closing the internal studio tasked with developing games for its Stadia cloud-gaming service, a move that raises questions about the future of the Stadia service itself.
- Google also will pay $2.6 million to more than 5,500 employees and past job applicants to resolve allegations that the internet giant discriminated against female engineers and Asians in California and Washington state.
Google launched Stadia in November 2019 as a new type of video-game platform that operates without a console and that stores game-playing sessions in the cloud. It lets players jump across devices including phones, PCs and laptops.
But in a Monday blog post, Google said it will no longer invest in creating its own games for the service beyond any “near-term” planned titles. Jade Raymond, who had headed up Stadia Games and Entertainment, is leaving the company. Google didn’t disclose the total number of job cuts, but said most of the staff in the game-development division will be moved to other roles.
It’s not clear how Stadia itself is faring. The service offers a free tier and Stadia Pro subscriptions that cost $10 a month. Some games are free and some must be purchased separately. Google hasn’t released user figures.
In the blog post, Phil Harrison, general manager of Google Stadia said instead of investing in original games — which can be pricey to create — Stadia will work with third-party publishers to help them bring their games directly to players on Stadia. Stadia users will continue to be able to play games on the service and Google will continue to bring new third-party titles to the platform.
NPD analyst Mat Piscatella said that because cloud-gaming technology is so new, significant shifts in strategy aren’t surprising. But choosing not to offer its own exclusive games on the platform means one less way Google can compete against other more established rivals. Sony and Microsoft just introduced splashy new PlayStation and Xbox consoles in 2020 that offer exclusive games.
“The development of exclusive content for a platform has been one of the most time-tested strategies in video gaming since the dawn of the console age,” Piscatella said “We’ll have to see how Stadia’s next phase develops to determine how much this move may impact its trajectory as a platform.”
R.W. Baird analyst Colin Sebastian said the holiday success of the PlayStation 5 and Xbox Series S/X proved that demand for traditional consoles remains high, making it more difficult for Stadia to break into the market.
But he said Google’s Stadia technology could still be a success in the long run.
“The cloud streaming technology will be relevant in years to come, and Google should look to license the technology to other companies, or wait out the video game industry until the new console cycle grows long in the tooth,” he said.
The settlement announced Monday closes a 4-year-old case that the Labor Department brought as part its periodic reviews of the pay practices at federal government contractors such as Google.
That inquiry resulted in accusations that during a period spanning from 2014 to 2017, Google paid female engineers less than men in similar positions. The pay discrepancies were cited in several Google offices in its home state of California, as well as at locations in Seattle and Kirkland, Washington.
Google had fiercely contested the allegations as unfounded before reaching the settlement without acknowledging any wrongdoing.
“We believe everyone should be paid based upon the work they do, not who they are, and invest heavily to make our hiring and compensation processes fair and unbiased,” Google said Monday. The Mountain View, California, company also said it has conducted internal audits during the past years to address any inequities in the pay of its male and female employees.
Nevertheless, the settlement will require Google to pay $1.35 million to more than 2,500 of its female engineers to compensate them for past discrimination alleged by the Labor Department. Another $1.23 million is earmarked for more than 1,700 women and Asians who unsuccessfully applied for engineering jobs at Google.
The settlement also requires Google to contribute $250,000 annually for five years to create a reserve to cover any necessary adjustments still needed in the future.
“Regardless of how complex or the size of the workforce, we remain committed to enforcing equal opportunity laws to ensure non-discrimination and equity in the workforce,” said Jane Suhr, who oversees the Labor Department’s federal contract compliance programs in San Francisco.
The settlement will barely put at dent in Google or its corporate parent Alphabet Inc., which generates more than $130 billion in annual revenue.
But news of settlement may further blemish Google’s once-cherished reputation as an employer that pampers its workers to the point of spoiling them with cushy paychecks, free food and other plush perks.
In recent years, more of Google’s own employees have been openly blasting management’s practices, including allegations of coddling powerful male executives who harassed female employees. More recently, thousands of Google employees have protested the December departure of an artificial intelligence researcher who says she was fired over a research paper that didn’t sit well with the company.
The growing unrest inside Google culminated in hundreds of employees forming a labor union in last month, a rarity in the tech industry.