The Future Of Gaming
Just like that. Change came to the gaming industry in a way that we all knew was coming. Alphabet's (GOOGL) announced the new "Stadia" streaming service for video games. This new platform, at least on the surface will eliminate the need for gamers to purchase physical hardware such as a console dedicated toward a certain format, other than Stadia's handheld, wi-fi capable controller that will connect via the Chrome internet browser. What will likely get the gaming crowd fired up is threefold. First, the seamless speed that it appears the service will be able to sustain in the rate of play. Second, the controller is expected to cost the consumer considerably less than the current consoles that this crowd is now playing on. Finally, third... the Stadia platform will come with a YouTube compatibility that allows viewers to "jump in." Sounds like fun.
As one who is long the shares of Advanced Micro Devices (AMD) , I was delighted, not only to see those shares run higher (12%) on Tuesday, but to learn that this action was due to the fact that AMD had developed a chip with Google for precisely this purpose. It surprised me not at all that AMD CEO Lisa Su would be in the right place at the right time, by the way.
The Evolution of Gaming in the Cloud
Alphabet has grand designs on not just being where gamers play, but in development itself. This will significantly impact gaming content providers in one way or another. The response across that industry appears to be mixed. What I notice, however, is just how fast the competition will come up behind Google on this. Just as the business of streaming entertainment has grown rapidly for music and television, so it will be for gaming.
Sometime later this year, there is talk that Microsoft (MSFT) announces a direct competitor. That's merely XBox defending it's turf. Amazon (AMZN) is expected to make that announcement next year. Amazon kind of never loses. That's my opinion. While these three are the largest names in the cloud, particularly the business cloud, can anyone deny that Alphabet trails significantly behind both AWS and Azure?
Does it sound like I'm not so hot on the stock of Alphabet? Hey. I get that the firm is a giant in the field of artificial intelligence. I get that in Waymo, the firm is a leader in the developing field of autonomous vehicles. You know what though? I am long Amazon. I am long Microsoft. I sold my Alphabet last week.
This Is Where We Part
I just can not own shares of Alphabet at this time given the comments made by Marine Corps General Joseph Dunford at an Armed Services Committee meeting last week. Dunford said "The work that Google is doing in China is indirectly benefiting the Chinese military." Reminds me of why I sold GOOGL last time I sold the stock, when the firm appeared to pull out of competing with other high tech competitors for the Pentagon's JEDI cloud computing program, possibly worth $10 billion over a decade. Now this. Oh, and Dunford took it a little further, stating that "... frankly indirect may not be a correct characterization of how it really is, it's more of a direct benefit to the Chinese military." There were senators that also opined on the matter. They are but politicians. Dunford? He's bound by a code of honor.
You may want to invest in the name. Enjoy. Go forth without me. Under the flag that you've seen on the left sleeve of my trading jacket for more than three decades, there is another one. A permanent one. I will find another way to make a buck.
For those who have forgotten, or no longer care, our flag still waves. Our flag, yours and mine... that flag ... is still there.