Slow down there, Monster of Mountain view backers. That’s the message from this SeekingAlpha contributor, who has a skeptical take on Google’s new foray into gaming:
It’s a near certainty that Stadia won’t win 100% of this game streaming business. Even if Stadia miraculously took 50% of this $28 billion opportunity, that means about $14 billion in additional sales for Alphabet.
Using analysts’ revenue estimates for 2020 as a starting point, and assuming a similar growth rate in 2021, suggest Alphabet revenue of about $225 billion by 2021. If Stadia generates $14 billion in sales at this point, that represents another 6% of additional year-over-year growth. There is little doubt there is a big opportunity in streaming gaming, but investors need to ignore the hyperbole in the headlines and temper their expectations.
Those are a lot of assumptions.
If people refuse to hand over money to Google for Stadia, Google will have to pull the plug on it before long because that is how the Monster of Mountain View rolls. That would be a fitting outcome.