INDUSTRY
Why Microsoft Shut Down Mixer and Teamed Up with Facebook
The 180-degree shift that followers of the streaming wars didn’t see coming
Let’s be real here: Twitch was eating Mixer for breakfast and had room to spare. Amazon’s streaming service has over 15 million users who use it every day and 100 million monthly active users. YouTube Gaming has 1.5 billion monthly active users (though that’s a skewed metric that doesn’t really add up to much in the end). To put that into perspective, Microsoft’s streaming platform only attracts a paltry 10 million monthly active users, less than the number of gamers who use Twitch daily.
Twitch entered the scene in 2011, well before its competitors, and was snatched up by Amazon for $970 million. Its massive viewer base, coupled with solid monetization options and videogame rewards for Prime (paid) spectators meant that Twitch had a leg up over its peers. Twitch’s diversity rose in accordance with its fanbase, with channels like talk shows and podcasts entering the mix. Mixer started out as Beam in 2016 before being acquired by Microsoft for an undisclosed amount. But they’ve always played second fiddle to the biggest elephant in the room.
Why Mixer?
Credit where it’s due, Microsoft did put in an effort. It tried one-upping Twitch on one thing Microsoft had the dice on: the tech. Its faster than light streaming technology minimized latency, granting users with mediocre internet connections a better experience. Xbox integration meant that console users could start streaming with the press of a button. Mixer also placed a heavy emphasis on streamer-viewer interaction, giving spectators the ability to make wagers with in-game currency or even influence the game with commands entered in the chatbox. In 2017, Mixer let a maximum of four streamers co-stream a game to an audience, a feature that Twitch managed to implement only in 2019. The former also gamified the experience of being a viewer with a reward system that let viewers level up by being loyal to their favorite streamers.
The less we speak about Twitch’s toxic userbase, the better. Regardless of whether it was because of Mixer’s newborn status or its limiter viewership, it housed a growing audience that was kinder to newcomers than the wasteland of insults and abuse Twitch has become.
Microsoft tried other means of stealing the spotlight. In a bid to win the hearts of customers, Mixer didn’t support third-party ads on its platform. Microsoft often compensated for this with cash of their own for their top streamers. Few can forget the deal that saw the biggest streamer on Twitch transition to Mixer. While Tyler “Ninja” Blevins said that it had more to do with the crunch hours he was putting in to keep his viewers hooked, Microsoft reportedly spent an estimated $20 million to $30 million on the deal. And now, he’s a free man. And so are the other Mixer streamers who had migrated from other platforms and had locked into exclusivity deals like Michael “Shroud” Grzesiek. Mixer slashed down their Pro Subscriptions from $7.99 a month to $4.99 to compete with Twitch’s paid subscription option but it was too little, too late.
With reports of poor morale and low staffing, Mixer had already let out its final gasp. Microsoft wanted growth and injected millions into the platform, but things didn’t work out in its favor.
While it was a bold experiment, Mixer is over.
RIP Mixer
Mixer just didn’t have the draw to reel in an audience that would make it a worthy investment in Microsoft’s eyes. Its limited monetization options forced streamers to sign up for a partner program and its userbase was in short supply, making it even harder for creators to earn on the platform. Twitch’s analytics tools were also well ahead of Microsoft’s, giving their streamers the metrics they needed at a glance. The numbers spoke for themselves. It was only a matter of time before the behemoth in the digital space would forsake a venture that had yet to pay off, despite years of investment. But Mixer wasn’t just run into the ground, it merely transitioned into a different sphere altogether: Facebook Gaming.
Why Facebook Gaming?
While Facebook Gaming’s numbers are a far cry from Twitch’s viewership, it has an advantage that Amazon’s streaming service doesn’t: Facebook. Leveraging a social platform that has 2.6 billion active monthly users as of Q1 2o2o, Facebook is poised to strike at the same audience with a renewed focus on gaming after the era of Words with Friends and Farmville faded. And with Oculus under its wing, it could push itself into the VR streaming space as well, something that is certain to kick off as more consumers succumb to the temptation of a virtual-reality experience. The rise of mobile gaming means that Facebook is in a better position than most of its competitors to ride the wave of Fortnite and PUBG Mobile streaming.
As long as the Facebook Gaming app doesn’t end up like Facebook Deals or Facebook Camera.
Giants like Facebook and YouTube already have a large number of users, but converting them to start watching live gaming content is the name of the game here. Facebook already makes it easy to promote your stream. The stream will play live, even for those just scrolling through their feed. While Twitch has fewer viewers, their engagement numbers define the charts. All of their users use Twitch for the same purpose: to stream or to view streams. On the other hand, Facebook users use Facebook for a million things. An advantage of integrating Facebook Gaming into the ecosystem is a reduction of online harassment, at least until users make fake accounts to get on with their business.
One thing that Facebook Gaming does differently is its lack of emphasis on exclusivity. DisguisedToast, who is perhaps Facebook Gaming’s biggest name, still streams on Twitch. Facebook has yet to announce subscription plans, but they still let steamers earn through affiliate programs. Their growth has been impressive: industry reports indicate that Facebook Gaming’s growth in terms of hours watched was over 238 percent compared to April 2019, while Twitch posted an equally impressive 100 percent boost in hours watched. While this depends on the initial amount of hours watched, growth is growth nonetheless. Meanwhile, Mixer only grew by 0.2 percent. A result that stirred the pot at Microsoft.
“We started pretty far behind.”
- Phil Spencer, head of Xbox
What’s in it for Microsoft and Facebook?
While it may seem like the final nail in the coffin for Mixer, it presents an opportunity for both parties involved. Facebook could use a boost in numbers from streamers migrating to its platform while opening up the possibility of leveraging Microsoft’s interactive and low-latency tech in its service. On the other hand, Microsoft has been hard at work developing Project xCloud, its cloud-gaming solution. Its rock-solid Azure architecture is one that that only Amazon’s AWS servers can rival. Partnering with Facebook could mean that gamers could enter a game right from the Facebook Gaming app, powered by Microsoft’s dedicated servers. A polished gaming experience that goes toe-to-toe with PCs and consoles, on the go.
One click between “I’m watching” and “I’m playing.”
While Project xCloud does need to work on its latency and load times, not to mention scaling on smartphones, it has promise. And only a few companies have laid down the groundwork needed for such an endeavor. With plans to release the service in 2020, Microsoft has bold plans and bolder ambitions. Data caps aside, the advent of mobile streaming could very well be the next big thing in gaming.
What happens next might just define the trajectory of mobile streaming and cloud gaming as a whole. An opportunity that not just Microsoft and Facebook contest for.
Mixer is dead. Long live Mixer.
