What the Ninja-Mixer Deal Means For the Gaming Industry
And what brands need to do in response
Last week, the inaugural Fortnite World Cup event brought thousands of gamers to New York City to watch professional gaming athletes compete for the $30 million prize pool. More than 40 million people tried out for a slot in the finals, and nearly 9 million viewers on YouTube alone watched the final day of the competition.
Yet, despite the smashing success, the biggest news that came out of the event has little to do with the tournament itself. Rather, the biggest news that came out of the weekend was all about how the biggest star in the gaming and esports world is switching streaming platforms. Ninja, one of the most popular Fortnite streamers and arguably the biggest gaming influencer at the moment, announced in a tweet that he will be leaving Amazon-owned Twitch for Microsoft’s Mixer.
Ninja’s high-profile move from Twitch to Mixer sets an interesting precedent for the whole gaming and esports community. It opens up a new chapter in the market that will see escalated competitions as platform-owners increasingly vie for audience attention by the proxy of gaming influencers, especially as the gaming industry starts to incorporate cloud-based gaming into its distribution. These parallel trends will eventually dovetail and shape the gaming and esports market into a more diverse and dynamic landscape that should benefit both the fans and the brands looking to get into the space.
The Ninja Move
Tyler Blevins, known by his professional alias Ninja, is one of the most influential game streamers, if not the most famous one, at the moment. He has been the most-followed streamer on Twitch with over 14 million followers, and over 50,000 of them are paying subscribers who pledge a monthly donation of $5 or more to him. More remarkably, he is one of the few gaming influencers that has broken through into mainstream fame. As the first esports athlete to grace the cover of ESPN Magazine, Ninja is no stranger to high-profile firsts. He’s appeared as a guest on Ellen Degeneres’ talk show, played with rap superstar Drake and released his own clothing and toy line sold in Target — helping him become a household name recognizable event to people who don’t play video games. Blevins told CNN earlier this year that he made around $10 million through sponsorships, ad sales, and subscriptions in 2018.
As a de-facto frontman for the cultural phenomenon that is Fortnite, Ninja’s decision to move from Twitch to Mixer understandably came as a shock. Forgoing his stable partnership with Twitch and his established audience base there to start from scratch on Mixer would be a risky move for any influencer, but Ninja may just be big enough to pull it off. Allegedly, Microsoft shelled out over $50 million to get Ninja to make the switch, showing just how determined the Xbox maker is to drum up interests for its own game-streaming platform Mixer.
As of Wednesday morning, Ninja has amassed over 1 million subscribers on Mixer. At first glance, this may seem very impressive, especially given that subscribing, unlike following, would actually cost money for fans. Has Ninja somehow managed to double his paying subscriber base by switching from Twitch to Mixer? Well, not really. As Paul Tassi at Forbes points out, Mixer is offering a free two-month subscription to Ninja’s channel, with essentially just the click of a button on a prominent banner above Ninja’s stream, which Ninja himself has been frequently promoting on stream since moving to Mixer. Once this promotional trial is over, it seems unlikely that he’ll be able to retain all of that inflated subscriber base.
Nevertheless, this move has already generated enough headlines and buzz for Mixer, so in a way, it is money well spent for Microsoft, who has long been invested in the gaming industry and now desperately need to have a streaming platform of its own to build out its gaming ecosystem.
Microsoft’s Game Plan
If you have not heard of Mixer before last week, you are certainly not alone. Microsoft originally launched the Twitch competitor in January 2016 as Beam, and rebranded it to Mixer a year later. Yet, it has so far failed to gain much traction, accounting for merely 3% of all game streaming hours in the second quarter of 2019, according to data from StreamElements. For comparison, Twitch dominates the market with over 72% of total game streaming time, with Google’s YouTube (19.5%) and Facebook Gaming (5.3%) at distant second and third places respectively.
Mixer’s relative obscurity reflects the historical development of the game-streaming market. Mixer is a late comer launched on the back of Xbox integration, so it had neither the head start that Twitch, launched in 2011, enjoyed in conquering the game-streaming market when there were few competitors around, nor the massive built-in user base that YouTube and Facebook have to leverage. In addition, Amazon started bundling Twitch memberships with Prime memberships after it acquired Twitch in 2014, making it an easy choice for young adults in Prime households. So for a long time, Twitch has been the go-to streaming site for top-tier streamers like Ninja.
Now, however, the landscape of gaming is starting to shift as the industry gears up for the impending boom of cloud-based gaming. Upcoming cloud gaming services like Google’s Stadia and Microsoft‘s xCloud promises to eradicate the hardware entry barrier for gamers and enable true device-agnostic gameplay. And when cloud-based gaming becomes a reality, it will no doubt reinforce the importance of game-streaming platforms as crucial hubs for aggregating attention in the gaming community.
We already know that Google will be integrating Stadia into YouTube to allow for seamless, one-click switch between viewing gaming content on YouTube and playing said games on Stadia. Theoretically, Amazon could integrate its other gaming efforts, including games from Amazon Game Studios, into Twitch, and it is reportedly working on a cloud-based gaming service of its own. Moreover, Sony has its PS Now subscription service, and many PS4 users also stream their gameplay to Twitch and YouTube. All this means that Microsoft desperately needs to make Mixer a legitimate contender to build out its gaming service ecosystem for a frictionless integration of consumption of gaming content and cloud-based gaming.
Besides this strategic ecosystem play, another reason why Microsoft is willing to pay Ninja more than $50 million to join Mixer may have to do with the fact that before he started playing Fortnite and became the most popular streamer in that game, Ninja began his gaming career as a pro Halo player. The next installment in the Halo franchise, Halo Infinite, will arrive as an Xbox Scarlett launch title in fall 2020. It is certainly not hard to see Microsoft prepping Ninja to become the public face for not only the next Halo game, but also its next-gen Xbox device to ensure a successful dual launch.
Looking at the big picture, all the ramped-up investment into cloud-based gaming from tech giants can also be attributed to the overlap between the infrastructure developed for cloud-based gaming and that of regular cloud services. Because cloud-based gaming will require the best cloud services to pull off, the interconnection between the two sectors means that whatever Amazon or Microsoft is investing into the development of Stadia and XCloud will be beneficial for AWS and Azure as well.
That being said, regardless of Microsoft’s masterplan, it is still too early to tell how this gamble will play out in the long run. For one, watching gaming content and playing video games are two related but distinctly separate modes of leisurely activities. Similar to how avid sports fans don’t necessarily play the sports they religiously follow themselves, sometimes video game fans would simply prefer watching some entertaining gameplay featuring their favorite streamers over playing the games themselves. For another, switching between separate channels for browsing gaming content and playing games may prove to be favorable among the gaming community as well. As we pointed out, Ninja’s impressive subscriber growth on Mixer at the moment may not be sustainable by itself. Given this massive behavioral gap between watching gaming content (esports or not) and playing the games, it is hard to say how much the shift towards cloud-based gaming will impact the popularity of game-streaming sites among audience and streamers.
Overall, the Ninja-Mixer deal signals a new reality where Twitch’s strong hold on gaming media is being challenged. There are very few gaming influencers at Ninja’s level, so even if there would possibly be copycat deals, there likely won’t be enough to significantly move the needle on this in the short run. In the long run, however, it seems safe to assume that by integrating game-streaming platforms (such as Mixer or YouTube) right into a cloud-based gaming subscription service (such as Xbox Game Pass or Stadia), the integration will encourage players of those cloud-based games — the next Fortnite essentially — to choose the integrated streaming solutions by default, thus helping Microsoft and Google chip away some of the gaming-content market that Amazon controls via Twitch.
Next Moves for Brands
This announcement no doubt puts Mixer on the map and showcases how much the gaming space is heating up as multiple platform owners compete for a piece of the growing pie. How much impact this Ninja-Mixer deal will help diversify the esports platform in the long run is hard to say, but at least Ninja will be setting up shop within Microsoft’s gaming ecosystem for a while. We may start to see more gaming influencers and esports stars sign with Twitch or its competitors as exclusive talents, just as how in-demand pro athletes switch teams between seasons seeking better deals.
For brand marketers looking to get into the gaming space, this Ninja-Mixer deal highlights two primary developments to look out for. One, Twitch is still king in terms of audience size and the overall number of top-tier influencers that brands can leverage to reach the gaming audience, and that will likely remain the case for a while. However, there will be competing platforms backed by other tech giants offering alternative options, and they will look especially attractive to brands that directly compete with Amazon and therefore have qualms about handing over ad dollars or valuable data to Amazon via Twitch.
Secondly, a diversification of streaming sites for gaming content should also spur some healthy competition among the platform owners to come up with better ad products. While Twitch has the most mature ad products for brands to get in on live streams at the moment, there is plenty of brand opportunities on the newer platforms too. In fact, Ninja is bringing some of his other revenue streams with him to Mixer. The announcement video featured cameos of appearances of two of his sponsors, Red Bull and Adidas, and Ninja’s Mixer page already features links to other sponsors. Driven by the need to monetize, those Twitch competitors will no doubt develop a robust lineup of ad products and integration toolkits for brand marketers before long.
At the end of the day, this deal is a testimony to just how prominent the gaming industry has grown to be in mainstream culture. It is highly improbable to think that such a deal would take place even just five years ago, yet today, with the tech giants increasingly looking to gaming as a growth area and doubling down on their investment in gaming, a deal like this makes perfect sense. With more money pouring into the space and cloud-based gaming about to further democratize access to games, the cultural impact of gaming will no doubt continue to grow.
Smart brands have always followed cultural developments to figure out where and how to position themselves within that cultural context. With the rise of gaming culture, it is time for brands to come up with a media strategy that corresponds with agility to the shifting landscape of gaming. Amazon is reportedly ready to make a push into in-game advertising, and Google, being Google, will most certainly extend its ad operation apparatus to its gaming business sooner or later. There are plenty of opportunities for brands to reach the growing gaming audience today, and there will only be more. It is up to brands to come up with the right strategy to tap into this growing cultural sector.
