Some of the industry's largest players have been in the game development space for 30+ years and even then are only marginally successful. Xbox itself was on the brink of being shut down/sold off a few years ago. What exactly did Google (and Amazon/Apple/Facebook) expect would happen?

Focusing on Stadia's strength as a platform seems to be a good move forward. It is a technically sound service. I'm sure the massive bump it got from Cyberpunk showed execs that a partnership-only gaming model could be successful. They do need to expand licensing, improve their subscription catalog and get more indie studios involved. Relying on users to consistently pay $60+ for games on top of the monthly fees is a losing business model.