but up until now they did apparently have funding to be running an internal studio? seems like those funds could have been better spent bribing tv companies like the parent is suggesting.
Google is a company of engineers. Engineers solve problems by building stuff, not by bribing companies. I think the main exception is Android and Ads, which also happens to be the main parts of Google I disagree with...
Building successful platforms isn't about engineering - many well-engineered platforms were market failures.
You have to enable third parties to be successful. Steve Yegge's Google platform rant[0] discusses this topic in detail.
If your platform isn't popular then you need to provide incentives for developers to target it.
"Each of the people we spoke with, who asked to be granted anonymity due to ongoing employment in the video game industry, echoed this sentiment — and said Google simply wasn't offering enough money, in addition to several other concerns." [1]
The interviewed developers also have doubts about whether Stadia has a future.
"This concern — that Google might just give up on Stadia at some point and kill the service, as it has done with so many other services over the years — was repeatedly brought up, unprompted, by every person we spoke with for this piece." [1]