Microsoft Corp.’s Xbox unit will shut down its Mixer video-game streaming service after failing to attract a large global user base and will recommend players and audiences shift to Facebook Inc.’s streaming site.
The software maker also plans to partner with Facebook on Microsoft’s xCloud mobile game service, which will be widely available by the end of the summer. Starting July 22, users who visit Mixer will be redirected to Facebook Gaming.
The surprise move comes less than a year after Microsoft lured popular streamer Ninja — whose real name is Tyler Blevins — from Amazon.com’s Inc.’s Twitch, the leading game-streaming service. The deal was touted as setting off a battle for top gaming talent in the $152 billion video-game industry.
Mixer’s stars, including Ninja and Michael “Shroud” Grzesiek, are under no obligation to join Facebook Gaming.
It was these top streamers who contributed to Microsoft’s realization that Mixer wasn’t working — some of them told the company they weren’t making enough money on the service, Xbox chief Phil Spencer said Monday in an interview.
“While we were proud of the community that we had built on Mixer, we weren’t achieving the scale goals that we had on our own,” he said, explaining the team decided earlier this year to exit the business and instead look for a partner.
“We hear it from our streamers, in order for us to have a successful streaming platform for them we need to have a large audience of viewers that create the business opportunity for them.”
Microsoft got into the game-streaming industry in 2016 with the acquisition of Beam, two years after Amazon paid almost $1 billion for Twitch to reach the teens and young adults who were increasingly spending time watching other people play games, instead of playing themselves.
Since then, the business has given birth to a competitive field of celebrity creators who play games for eight to 12 hours daily. Facebook Gaming, which began in 2018, took some market share from Twitch in 2019.
Microsoft’s deal to sign Ninja last summer set of an unprecedented wave of fighting to lock down video-game streamer and influencer talent — and with them, their audiences — among Mixer, Twitch, YouTube and Facebook.
But Microsoft’s millions of dollars in spending on Mixer hasn’t resulted in significant user growth.
Mixer is in fourth place among platforms tracked by market-research firms StreamElement and Arsenal.gg and had less than 1 percent of total streaming hours in April.
Facebook has spoken with Ninja and others, said Vivek Sharma, the social network’s vice president and head of gaming. Sharma said he is going to let them announce their own plans, although Facebook would love to welcome them. “These folks are like multimedia celebrities,” he said.
Ninja’s representative didn’t return a request for comment. The streamer himself tweeted that he has “some decisions to make.”
Under the partnership, Microsoft plans to work with Facebook on xCloud, a service for streaming video games to mobile devices that the company is testing with users now.
The idea will be to allow gamers to click within a stream on Facebook in order to play or purchase a video game in xCloud, Spencer said. Spencer and Sharma declined to disclose terms of the deal.
One part of Mixer will stay at Microsoft — some of the video technology that enables consistent, speedy streams and some interactive features will move to Microsoft’s Teams videoconferencing software, Spencer said.
That will help Teams as it hosts more large webinars and broadcast events rather than just smaller corporate conference calls. Though other Mixer employees will shift to work on products like xCloud, Spencer said he couldn’t rule out some job cuts.
Microsoft had already begun talking with Facebook about this move when the U.S. went into lockdown related to the Covid-19 outbreak in March. Still, user data for April underscores Microsoft’s struggle to make Mixer work.
Even as more gamers were confined to their homes amid the global pandemic, Mixer’s 15% growth in hours watched in April from the prior month lagged behind gains at Twitch and Facebook, and fell far short of the 45% growth for the overall streaming sector, according to StreamElement.
Other Microsoft gaming properties, such as Minecraft and the GamePass subscription service, saw larger increases linked to the pandemic stay-at-home orders.