Streaming Wars: The Rise and Fall of Microsoft's Mixer
As a more “traditional gamer” like myself, I roll my eyes when I hear terms like “Streaming Wars”. After seeing streaming take off in China, I quietly hoped that it would remain an isolated phenomenon in the far East. Watching other people play games that I could play myself has always seemed ridiculous to me.
Whether I like it or not, however, streaming is “a thing” and it’s here to stay. And the tech giants of Amazon, Facebook, Google, and Microsoft all want a piece of the action.
Which brings us to the question: Can you just straight up buy a community? Well, Microsoft tried. And as of a few days ago, their retreat from streaming seems to indicate that, no, it’s not as simple as just buying an audience.
So let’s talk a bit more about the state of streaming.
The Streaming Landscape (Before 2020)
As you probably know, Amazon acquired Twitch for about $1 billion in 2014. From there, Amazon succeeding in turning the platform into a “digital town square” for video games in general, eSports in particular, and internet culture at large.
Streaming is, by its nature, more engaging than a pre-recorded YouTube video. The entire point is to tune in live, share reactions, interact with the streamer, and let the stream itself unfold organically. This level of sustained deep engagement must have been extremely attractive, because upon witnessing Twitch’s success, everyone else tried to get in on the action.
The Players
1. Twitch (Amazon): The undisputed market leader holding over 75% of total gaming hours watched. It’s almost a pure gamer platform and already has deeply rooted monetization loops in the form of bits and subs.
2. YouTube Gaming (Google): Trying to convert or siphon off Twitch’s streamers by leveraging Google’s existing massive infrastructure and resources. It’s better for pre-recorded content (probably because that’s what YouTube mostly is), but its live chat feels less… intuitive.
3. Facebook Gaming: Facebook seems to enjoy a legitimate advantage in Southeast Asia and Latin America. They have already signed deals with major eSports leagues and are aggressively recruiting creators. I think this is flourishing where Facebook hasn’t yet been fully abandoned by younger users. Having 1+ billion users to push live streams onto via their feeds also doesn’t hurt.
4. Mixer (Microsoft): Mixer (once called Beam) was bought by MS back in 2016. It was supposed to be positioned as a technically superior and feature-rich ecosystem that linked with Xbox Games Pass.
Microsoft’s Weaponry & Talent Acquisition
On paper, Mixer was impressive. It boasted the FTL (Faster Than Light) Protocol, which reduced the delay between the streamer performing/speaking and the audience seeing it. The standard is anywhere from 5-15 seconds, and FTL had a delay of less than one second. This near instant interaction allowed players to do neat things like instantly trigger in-game events in the streamer’s game.
To add to this technical advantage in platform reactivity, Microsoft also had the Xbox Ecosystem Hub. If you wanted to stream yourself playing a game on either Xbox or a Windows PC, you could use Mixer with a single click or button push. Directly beneath the video player, the audience could tap a link to instantly purchase the game they were watching.
So by 2019, Mixer was an impressive platform from a technical standpoint. The problem was, players didn’t seem to care. They stayed on Twitch because that’s where they had been and that’s where everyone else still was.
What did Microsoft decide to do? Open their wallet. Last August, Microsoft signed Ninja to an exclusive multi-year contract supposedly worth $20 to $30 million. A few months later they then poached Shroud from Twitch for $10 million.
If you can’t beat them, entice them to join you by paying their favorite personalities a lot of money.
Why it all Flopped
Millions of curious fans indeed did download Mixer to watch Ninja’s streams. But once he was done, they were done, too. They closed Mixer and went right back to Twitch.
Mixer bought a few big names, but they failed to build up that middle level of content creators that hold the interest of users when the biggest stars aren’t on. The top row of Mixer featured the mega streamers with thousands of viewers. Who was on the next row? A bunch of unknown streamers with a handful of viewers.
Then the pandemic happened. This forced everyone indoors for even longer periods of time, sending viewership numbers on Twitch and YouTube to new highs. Mixer’s numbers? They didn’t enjoy any major boost. It is estimated that Mixer only reached 2-3% of total streaming hours watched.
So it looks like Microsoft, after failing to see the lockdown growth others have so obviously enjoyed, has chosen instead to cut its losses here. Supposedly they’re paying out Ninja and Shroud’s guarantees and handing the rest of their infrastructure over to Facebook.
I’m sure Microsoft was well aware of network effects and the nature of dual-sided platforms, but it’s a bit confusing as to why they didn’t create other initiatives to get smaller creators onboard. YouTube has its massive base of YouTube creators (and their audiences) to lean on. Facebook has 1+ billion monthly active users. So why Microsoft didn’t prioritize incentivizing both streamers and viewers more remains a bit of a mystery to me.
So What’s Next?
As much as streaming has taken off in recent years, the most recent winner might be Discord. Its user base has surged by 50% since the pandemic forced everyone indoors. And perhaps I’m being a bit biased with my longing for the IRC days, but Discord feels like a suitable place for gamers to hangout as a more organic successor to IRC, Xfire, Steam communities, Reddit, and gaming forums.
Could Discord launch a livestreaming feature? Perhaps. And if there’s any platform that appears to be a natural challenger to Twitch’s gaming community crown, it’s Discord.
