A statement from a Google employee, Dov Zimring, has been released as a part of the FTC vs Microsoft court case (via 9to5Google). Only minorly redacted, the statement gives us a run down of Google’s position leading up to Stadia’s closure and why, ultimately, Stadia was in a death spiral long before its actual demise.
"For Stadia to succeed, both consumers and publishers needed to find sufficient value in the Stadia platform. Stadia conducted user experience research on the reasons why gamers choose one platform over another. That research showed that the primary reasons why gamers choose a game platform are (1) content catalog (breadth and depth) and (2) network effects (where their friends play).
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“However, Stadia never had access to the extensive library of games available on Xbox, PlayStation, and Steam. More importantly, these competing services offered a wider selection of AAA games than Stadia,” Zimring says.
According to the statement, Google would also offer to pay some, or all, of the costs associated with porting a game to Stadia’s Linux-based streaming platform to try and get more games on the platform. Still, in Google’s eyes, this wasn’t enough to compete with easier platforms to develop for, such as Nvidia’s GeForce Now.
You’d only be able to play with people local to you, in the same Stadia datacenter. If Stadia wanted to minimize latency, they would increase the number of datacenters (thus making fewer people per instance).