Asked about the economics of game streaming, Sean Hollister explains that cloud gaming costs are tied to GPU supply, which AI data centers are soaking up. He speculates that older AI hardware could get a second life serving games.
Google absolutely has not. They tried Stadia and basically went out of business. Amazon has continued along with Luna, but it has changed every couple of years what Luna actually is.
That's very true.
…But right now, GPUs are very expensive. They're not just expensive for consumers. AI data centers are buying these up. They are wanted for different things than streaming cloud games right now. And they are being used a heck of a lot in those servers. So there's this thought that, yes, the economics have gotten better over time. Right now they're worse. Right now they're not so great. But what happens when all of these GPUs and data centers are no longer the latest and greatest for the latest and greatest AI models? Are they going to decommission those, throw them out, write them off? Or do they maybe repurpose those for cloud gaming? The other thing to think about is at any given time, 99% of the games that exist can be run on old hardware. Your Steam Deck, people complain, oh, it's not good enough for the latest and greatest games. It is not. It is getting pretty old in the tooth if you want to play the new hot things that are coming out right now. But there's that long tail of decades of games that do play on it. So I…
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Talk to me about Microsoft specifically, because I think I'm struck by the fact that the companies doing this are mostly companies that are already invested in some part of the infrastructure, right? Amazon is a huge cloud provider. NVIDIA makes the GPUs. Microsoft, obviously, a huge cloud…
I agree with you. I would say one thing is that it's the kind of infrastructure that it has built out is maybe not necessarily until recently with the AI, you know, all the GPUs and the AI data centers, maybe has not been the right kind of compute for gaming. So I wouldn't say they just like…