What Is Alphabet's Stadia?

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At the Game Developers Conference, taking place this week in San Francisco, Alphabet (GOOGL) - Get Report announced Stadia, the company's cloud gaming platform.

Stadia promises to eliminate the need for physical hardware (except for a controller, with a Stadia-based one also being announced at GDC) and allow gamers from all over the world to play games, in hi-definition via the Chrome browser, on any device.

While this has been touted as the "Netflix of Gaming," there are certain obstacles that Alphabet didn't address at the conference if it is to be truly as accessible to the masses as Netflix is.

The main issue is internet speed. Alphabet claims you can achieve 1080p at 60 fps on speeds as low as 25 mbps, or 4k on speeds of 30 mbps. That would be unprecedented for the amount of data needed to stream video games and has garnered a lot of skepticism from the gaming community on twitter.

However, if this all works as promised Alphabet will not be the only winner from Stadia. Alphabet partnered with AMD (AMD) - Get Report to develop a custom GPU specifically designed for Stadia. 

ActionAlertsPLUS Research Analyst Zev Fima said, "while this is an obvious win for AMD as it will no doubt aid their push into the cloud and make them more competitive against Nvidia (NVDA) - Get Report , we should note that AMD chips are also found in PlayStation (SNE) - Get Report and Xbox (MSFT) - Get Report consoles, so we should expect some cannibalization there as cloud gaming eats away at the console market. However, this was going to happen anyway, so it's definitely a major positive that the company was tapped for this project."

Video game publishers, such as Take-Two Interactive (TTWO) - Get Report and Activsion-Blizzard (ATVI) - Get Report also stand to benefit as Stadia should significantly increase their total addressable market.

Alphabet is Real Money's Stock of the Day. Check out what Kevin Curran had to say for more on the winners and losers from Alphabet's Stadia announcement.

Alphabet is a holding in Jim Cramer's Charitable Trust Portfolio ActionAlertsPLUS. Want to know when Jim buys or sells shares of GOOGL? Sign up for a free trial of ActionAlertsPLUS today.

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