buildd

buildd

05-10-2022

04:20

Streaming wars: • 2014: Amazon buys startup, Twitch • 2016: Microsoft buys startup, Mixer Streaming hours in 2018: • Twitch: 9.36B hrs • Mixer: 168M hrs, 1.7% of Twitch! Finally, Mixer was shut down in 2020. Here’s how Amazon WON and Microsoft LOST the streaming games! 🧵

Structure: 1. Two teens start a business 2. Microsoft buys them! 3. Microsoft's BIG entry into live streaming 4. BIG bet on popular streamers 5. Microsoft pulls the plug! 6. So what went wrong? Why did Mixer FAIL?

1/ Two teens start a business! Mixer's origins go back to 2011. Matthew (13 y/o) started hosting servers for his gamer friends as a hobby. Matt’s service got very popular in the gamer circle & he quickly converted it into a business with James (15 y/o). (contd.)

Both of them decided to bootstrap this company, growing it on their own terms. And by 2014, the company was valued at $5 million! But James and Matt had other plans for their project. (contd.)

They shifted their focus towards a new activity that was taking over — live streaming. They quickly developed and launched a beta version of their own streaming website. Growth was slow at first, but they soon hit 20,000 monthly viewers!

2/ Microsoft buys them! In Jan 2016, Matt & James officially launched this streaming service as 'Beam'. As Beam became more popular, it came under Microsoft’s radar. Microsoft was looking to expand past Xbox into the gaming industry. So, they bought Beam in Aug 2016.

3/ Microsoft's BIG entry into live streaming Microsoft relaunched Beam as 'Mixer' in 2017 and introduced new features with rebranding. A key highlight was 'co-streaming' — 4 people could stream on a channel simultaneously! But, Mixer failed to make any big strides. (contd.)

By the end of 2018, Twitch watch time ⇒ 9.36 billion hrs Mixer watch time ⇒ 168 million hrs Even after 2 years, Mixer barely covered 2% of Twitch’s market share! Of course, Microsoft was getting nervous. More so with Facebook's plans to enter the streaming market. (contd.)

4/ BIG bet on popular streamers To get ahead, they signed on popular streamer 'Ninja'. Ninja was a top creator at Twitch with 14 million viewers! Microsoft continued adding more popular streamers from other platforms. But, this only had short-term benefits. (contd.)

Mixer's streaming hours increased, but only for the next quarter. Plus, the overall watch time and viewers were still slipping. This meant that Mixer's new viewers came for Ninja, and left with Ninja. But, Mixer's core user base was still bleeding dry.

5/ Microsoft pulls the plug! Soon enough, the founders also called it quits. And, Microsoft finally shut down Mixer in June 2020. They collaborated with Facebook, and transitioned all their existing partners to Facebook Gaming.

6/ So what went wrong? Why did Mixer FAIL? A) Microsoft's BIG bet failed Mixer put all its resources into promoting big names like Ninja. And, made it hard for new streamers to buildd their audience. Twitch did the exact opposite, and promoted new talent organically.

B) Stiff competition + timing of entry Mixer entered the market a little too late. Twitch had the first-mover advantage and grew its audience organically. YouTube and Facebook were late entrants but had a wide user base waiting for them. Mixer had neither.

C) Huge expenses Operating & maintaining a live-streaming service is expensive. Amazon-owned Twitch had AWS. Microsoft-owned Mixer had Azure. With Twitch’s billion watch hours, this investment made sense for Amazon. But, it stopped making sense for Microsoft.

So, what do we learn from Mixer's story? Well, Mixer was a great product, but it didn't have great marketing/distribution to support & scale it. Goes to show how building an amazing product even with Microsoft's backing is usually NOT enough.

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