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Stadia is Google's new streaming service for games — no console needed

San Francisco(CNN Business) Google is not making a gaming console.

It is, however, launching a streaming service just for video games that will work on any TV with Chromecast, computers running a Chrome browser, and Google's Pixel devices. You don't download the games to your devices, just play them over any Wi-Fi connection.

The Netflix-like product is called Stadia (that's the proper plural of "stadium") and is expected to launch later this year with big name titles including "Assassins Creed Odyssey" and special YouTube features. Even without a console, it could help Google (GOOGL) take on game industry leaders Microsoft (MSFT), Sony (SNE) and Nintendo (NTDOF).

Google announced its big foray into gaming Tuesday during a presentation at, fittingly, the annual Game Developers Conference in San Francisco.

Before the conference, the company's head of gaming sat down with CNN Business to talk about the top secret project, previously rumored to be codenamed "Yeti," and give us a hands-on demo.

"There was a lot of speculation that we were going to be making a console, but that's actually [not]part of our strategy, we want to be completely screen agnostic," Phil Harrison, a vice president and general manager at Google, told CNN Business. "We don't want players to be spending hundreds of dollars, sometimes thousands of dollars, to create a gaming rig in their home."

Streaming services such as Spotify (SPOT), Hulu, Netflix (NFLX) and Apple Music (AAPL) have taken over movies, TV and music, but game play has mostly been a holdout due to the large amounts of processing power and internet bandwidth required. Games need to handle instant response times, and even a half-second pause for buffering could be unacceptable to serious players. Gaming service Steam has some streaming capabilities, but you typically need to download a game to you device in order to play it.

Solving the streaming puzzle

Stadia will stream games in 4K at 60 frames per second in HDR with surround sound over a 25 Mbps internet connection. For now, it only works over Wi-Fi, but Google expects it to work on 5G connections in the future. You don't need to download a game and no special hardware is required — other than a $35 Chromecast to play on a TV.

Harrison, who previously worked on both the Xbox and PlayStation, says streaming something this big without losing quality is one of the "hardest problems to solve in networking anywhere on the planet." Google's solution is to do most of the work in the cloud. Processing doesn't occur on the local device, according to Harrison. Instead, everything is done in the data centers it has around the world.

"We know that streaming is the next frontier for the games industry," Harrison said. "We're not the only ones with this thought. But we're very confident that we have a unique set of capabilities and abilities."

Google's announcement was enough to prompt concerns among investors about Stadia's potential impact on established video game companies. Shares in Nintendo and Sony fell more than 3% on Wednesday in Tokyo.

Google does have a new gadget

The company may not be building a PlayStation-like box, but it is making one piece of new hardware. The Stadia Wi-Fi-connected controller looks like a typical handheld controller with a pair of special buttons — one to summon a video-game version of Google Assistant, and the other to capture game highlights to share on YouTube.

You can ask the assistant questions like, "Hey Google, how do I beat that boss?" and it will take you to a YouTube video with the answer.

The controller also connects directly to the data center instead of locally to the device you're playing on, which Google says will translate to better performance. (The streaming service will also work with any third-party HID controllers.)

During a demo at its Mountain View, California, headquarters, Google product manager Khaled Abdel Rahman began playing "Assassin's Creed Odyssey" on a laptop in Chrome. He hit pause, grabbed up a Pixel phone with a controller attached, and picked up right where he left off, leaping off a rocky cliff. Then he did one more pass to a large TV with a Chromecast and picked up the Stadia controller. The idea, he said, is to let someone play the game wherever they are during the day.

Created for the YouTube generation

As the name implies, Stadia is built as much for the people who watch video game play as the ones who do the playing. Google might not be known as a gaming company, but people watched more than 50 billion hours of gaming on its YouTube service in 2018. And every day, 200 million people watch games on YouTube.

The Stadia system is built to work with YouTube and includes a feature that lets players drop a pin at a favorite moment, and then share it online. Anyone can view that pin and jump right to that same exact situation in the game and start playing. Another option lets viewers join the person they're watching live.

"One of the great things about Stadia is the power of linking the world of YouTube and game play together," said Harrison. "If I'm on YouTube and I'm a creator talking about NBA 2K, the latest basketball game, I can invite my fans, my audience [and] my subscribers to join me in that game."

Much is still unknown about the project, including how much it will cost, what other titles will be available, when it will work on non-Pixel phones, and if the promises of interruption-free game play will work. Google says it started its own studio called Stadia Games and Entertainment to create titles exclusively for the platform, but doesn't have any finished games yet. But it's clear Google thinks the future of gaming is watching and playing.

"Bridging those two worlds together is not just the future of multiplayer, but it's the future of entertainment broadcasting," said Harrison.

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