When You Come at the King

Everyone loves an underdog story.

When Mixer, a new video game streaming platform was launched in 2016 (initially under the name Beam), the gaming community was excited to see a new competitor enter the streaming arena.

The market, for anyone that isn’t familiar with the space, is far and away dominated by the streaming giant Twitch

Platform Market Share by Hours Watched

Mixer was created to disrupt Twitch’s market leadership, and bring some meaningful technical innovation to the industry.

What happened this week, though, is that the underdog, well… died.

Last Monday, news broke on the company’s blog, and quickly spread across social media and news outlets, that the platform was shutting down. 

What the announcement also included, though, ended up being a far more interesting story: upon shutting down, Mixer is partnering with Facebook Gaming.

The partnership basically means that Mixer will drive all their website traffic to Facebook Gaming, and many existing Mixer partnered channels will be grandfathered into the Facebook Gaming partner program. This allows them to keep the main partnership benefits, like subscription revenue, extra channel features, etc.

Today, we’re going to explore what this new partnership means for both Facebook and Microsoft (Mixer’s owner) going forward.

Before that though, we’re going to dig into what led to the underdog’s demise — and a deep dive into what it means to build a community, beyond building a platform.

Mixer is dead. Long live Mixer.

So what killed Mixer? 

These last days I’ve seen plenty of analysis of the concrete numbers around Mixer.

In fairness, they weren’t looking great.

Peaking in Q2 2018, Mixer’s total watch hours per quarter have only dropped.

For comparison, let’s look at similar figures across the industry:

Twitch clearly stands out as a behemoth in their stream numbers over this period. Though, as the EntertainmentStrategyGuy points out in his insightful piece, from Dec. 2018 to Dec. 2019, Twitch saw total watch hours grow by a relatively minor 1.7%. Not great, not terrible.

Nonetheless, though, Twitch singlehandedly dominates the entire video game livestreaming space. Meanwhile, Mixer’s numbers show growth that could quite easily be lost to a rounding error.

But the numbers are just the result of several actions and decisions that put them in this spot. It’s these decisions that we’re going to be exploring today.

Competitive Advantages

The leading issue underlying these figures is this: Mixer played to no competitive advantage.

A bold statement, sure. Let’s break that down, and look at Mixer’s competition to see what it really represents.


Twitch is the oldest major player in the industry. Born as, Twitch has a long legacy in internet streaming history, and even more so in video game streaming history.

By virtue of this, they have by far the most entrenched community. The audience on Twitch is very loyal. For many, they don’t just watch a streamer, first and foremost, they watch Twitch.

This is a huge competitive advantage, and one Twitch plays to. Their community, their audience of passionate gamers and viewers is what makes up the large majority of the platform’s value today.

Amazon (Twitch’s parent company) doesn’t share figures for the company in their financial statements, but if they did, I imagine Twitch’s balance sheet would look something like this:

So, Twitch plays to its first-mover advantage and entrenched community.


Let’s look at YouTube.

YouTube has a massive advantage in the smooth transition from live content to video/VOD. Immediately upon finishing a stream, that however-many-hour-long piece of content can be instantly turned into a ‘normal’ YouTube video.

A great feature of this is the ability to display a recording of the stream’s live chat alongside the video, to follow the audience’s reaction in real-time, even after the fact.

This is a massive attraction for existing YouTube video creators looking to develop long-form content, without the headaches involved in repurposing content from a separate platform.

YouTube creators looking to expand to live content also benefit from already having their audience natively on the platform.

No need to try to drag your viewers away from the site, they can watch you directly where they’re used to watching you. Only this time, it’s live.

Facebook Gaming

Facebook Gaming plays to the website’s culture of sharing content and being a true ‘social’ platform at its core.

Similar to YouTube, an audience (to the tune of about 1.8B) is already using Facebook daily. The challenge remains to expand that audience to the gaming division of the platform, but the audience is already in the Facebook garden, and are used to sharing content there.

Facebook is well positioned to play to its existing social culture.


And now we reach Mixer. This is where it gets tricky.

Mixer played to no huge advantage.

In fairness, they did offer some differentiation in the form of their technical innovations. They were the first streaming platform to use “FTL” (“Faster than Light”), a streaming protocol which served to reduce the delay between the action and the viewers to under 1 second.

Typically this delay was around 20ish seconds on most sites, so the real-time interactions between the chat and the streamer were massively enhanced.

They also integrated a handful of interactive features, such as in-stream voting, which were nice-to-haves, but never a leading attraction for most viewers.

While these technical innovations were definitely game-changing (pardon the pun) at the time, they weren’t really enough to differentiate the platform against Twitch and YouTube, the two leading players in the space.

More than anything, Mixer was sold as a “Twitch with some cooler features”.

As the saying goes, though, it’s not enough to be against something, you need to be for something else.

And in the case of Mixer, there never really was much of a “something else”.

You may have noticed a common theme between the advantages of Twitch, YouTube and Facebook Gaming. In some form, they each draw power from access to a huge userbase. 

Of course, a startup platform like Mixer can’t compete on that front, straight out of the box.

The commonality, across all these platforms though, is that a userbase alone isn’t enough. The key lies in turning that userbase into a community.

It’s here that Mixer, or Microsoft, had a fundamental misunderstanding of what a Twitch competitor has to be.

A streaming service is not just a distribution platform.

First and foremost, it’s a community.


In one view, Mixer (or Microsoft) tried to spur platform growth by following the playbook of TV/movie streaming platforms.

If you’re Netflix or HBO, you want to bring content or talent to your platform which won’t be available anywhere else. Ideally, this will attract new users to your ecosystem, who hopefully will use your service as their main streaming service in the future.

Whether it’s winning the license to the entire Seinfeld catalog, or producing an exclusive special with its star comedian. These platforms benefit hugely from making their service the exclusive location to see that content.

Video game streaming sites have followed the same playbook, and Mixer didn’t half-ass it.

Less than a year ago, Mixer signed an exclusive deal with Ninja, the Halo pro player turned Fortnite streaming superstar. At the time of the move, Ninja was by far the largest streamer on Twitch.

A couple of months later, Mixer doubled down on talent acquisition with the announcement that Shroud, another top Twitch streamer, was moving to the platform. 

Both moves sent huge waves through the gaming world. Particularly with the Ninja announcement, the question was whether these moves would hurt Twitch enough to make a significant dent in their numbers — and if it did, did this signal that Twitch was now at the mercy of the highest bidder poaching any and all of their top talent?

As it turns out, the dynamics of growing a livestreaming platform aren’t quite the same as those of growing a content streaming platform.

If you’re a Netflix subscriber, and one of your favorite shows moves to Prime Video, you’re very likely going to follow it to the new platform. The switching costs are pretty minimal.

Even if you now have two subscriptions, the experience is mostly unchanged. You hop over to Prime Video to watch that show you love, maybe discover another series or two there, and use Netflix for the rest.

Maybe, even, you love the Prime Video library so much you decide to make the switch entirely. In any case, the experience of watching that content is pretty singular. Whichever platform you happen to be watching, once you hit play, the experience is about the same.

Mixer, as others have learned in the past, learned that for interactive communities such as livestreaming sites, this couldn’t be further from the case.

For inherently interactive communities, the switching costs are far from minimal. Stream watchers don’t want to move to another site (even though it’s free), just to follow one streamer they love, among the many they watch on Twitch.

When you leave Twitch to follow someone to their new streaming home, you’re not just leaving behind the other streamers on Twitch, you’re leaving behind an entire community.

Culture, Communities, and Curious Memes

Any social network has an engrained culture. A set of rites, rituals, and common understandings that make its users, otherwise a random group of people, into a real community.

When a new challenger enters the social network/platform space, they’re not just competing against the platform, they’re competing against an entire culture.

To say that Twitch has a strong culture would be a bit of an understatement. Any community has its own set of in-jokes, references and shared history, but Twitch has all of that x100.

And it gets weird.

At some point, I’d love to do a deep dive into gaming culture. Having been a ‘gamer’ well-engrained in the gaming community, and having built an audience of a few thousand in the space, I’ve long been fascinated at the strange world that is the gaming ‘community’.

The number of strange memes, references to a seemingly innocuous moment from a Twitch stream 8 years ago, and peculiar jokes in the community are astounding. Every other day I find myself trying to explain a seemingly nonsensical online community in-joke to my girlfriend. Usually, I get about halfway through before realizing that even I can’t quite figure out why it’s funny, but it still is.

She usually responds with some variant of “Uh-huh…”

While the gaming community isn’t the only online community with a long history of shared experiences and esoteric ideas, it might be the community where it’s the most noticeable.

Twitch in particular does a great job of maintaining this history and in-jokes through ’emotes’ — little custom-made emojis that can be used in the text chat alongside a stream.

There’s a long list of site-wide emojis, often birthed by moments or people that remain iconic across the entire gaming community. Many streamer channels also have their own list of emotes they can create, usable only in their chat, or by their paying subscribers.

Most of these emotes have a specific meaning or context, non-obvious on the surface, but one a seasoned Twitch ‘veteran’ understands.

If you’ve never watched a Twitch chat 20,000 viewers deep suddenly explode with a TTours spam, it’s not all that obvious what this emote could mean, beyond… a photography tour?

To try to explain just why and when this emote is used wouldn’t quite paint the whole picture.

It’s a perfect example of what Luc Benoist would call “objective esoterism“: I can tell you all about the context of that emote, but words alone can’t tell the whole story.

These references, this shared knowledge strengthens the invisible bond between the platform and its users.

By leaving Twitch for Mixer, you’re leaving behind an entire community of people who understand the ideas you do and know all the in-jokes you do.

You’re leaving behind your tribe.

Beyond being a ‘local’ in a particular streamer’s channel, this sense of community makes Twitch regulars feel like a ‘local’ to the entire platform, to the tribe.

Bijan Stephen offered an interesting view of communities on Twitch. In this view, there are three parts to the community interactions on the site:

  • Streamer to their livestream — this provides content to the platform
  • Livestream to its audience — this builds a localized community
  • Streamer to other streamer — this acts as some form of networking and helps cross-pollinate audiences to and from other creators

I’d like to offer a fourth part to this vision, though:

  • Audience to other audience

In the same way that a company’s best customer is one that freely acts as an ambassador for the brand, a leading advocate for the product or service the brand offers, a streamer’s audience can serve as an ambassador for a streamer, even in foreign lands (ie. a different Twitch stream).

Pictured: Ambassador diplomatic relations

Moving any stage of these community interactions out of the ecosystem in which they were born — ie. trying to woo an audience away from Twitch to Mixer — is an impressively hard task.

The Audience Equation

In the livestreaming world, then, buying talent doesn’t have the same swaying power that it does in the content streaming world.

In the context of livestreaming, we can formulate it like this:

Audience + $$$ = ability to attract talent, which can supercharge growth.

$$$ can bring talent on its own, but is not enough to attract an audience. This approach can only work when its supplemented by heavy investment in brand-building.

In putting the pieces in place to build a real community alongside the newly acquired talent, there is a stronger possibility of attracting a lasting audience. This doesn’t make it easy, because until achieving strong traction, that tribe is still in another castle, but it makes it possible at very least.

Microsoft never took this aspect of the platform seriously enough with Mixer.

The moment they signed Ninja marked the moment Microsoft told the world they felt that organic community growth takes too much time or too much money.

Rather than help supercharge growth, they expected their acquired talent to birth it entirely.

In the VC-backed, Silicon Valley startup world, this hypergrowth is very often necessary. These types of gambles, throwing cash at the problem, often can pay off. They also tend to be make-or-break situations.

If Airbnb hadn’t looked to expand overnight to new markets worldwide, burning money along the way, it likely would never have been able to compete with each local competitor quickly popping up around the globe, upon seeing Airbnb’s success. They had to move big, and fast, to kill that risk.

Microsoft, though, isn’t in that position.

They’re not a venture-backed startup in a do-or-die situation. Hypergrowth isn’t a pre-requisite when you have the time, talent, and money to build a long-term challenger.

Mixer died because money can’t buy an audience.

Winners and Losers

As we explore the business strategies behind the companies here, talking about them as we would players on our fantasy football team, it’s easy to lose sight of the human impact behind these decisions.

Other than the likely upcoming layoffs at Microsoft in the Mixer department, the group hardest hit by the news is undoubtedly the army of creators, until recently, livestreaming on Mixer.

On a side note, judging by reports of creators learning that Mixer was shutting down via their audience in their stream chat, it looks like the move blindsided streamers.

Of course, Microsoft wasn’t going to email creators before the information went public, but the announcement came out of nowhere. Although the Mixer founders left the company last year, leading up to the day, not a word had been leaked or rumored of any potential shutdown.

Another party losing out in the deal is every other smaller streaming platform. While the industry was already widely consolidated in the hands of Twitch and YouTube, Mixer’s death (ahem, “partnership”) will do little to make the lives of smaller players such as DLive any easier.

On the other side of the equation were the Mixer golden boys.

If anyone won big out of this deal it’s Ninja and Shroud. Getting signed by Mixer on an 8 figure deal, being limited to streaming there for not even a year, then reportedly forcing Microsoft to buy them out of their contracts, it’s been not too bad a year for both streamers.

Better yet, they now get to decide to either return home to Twitch or shop around for a new exclusivity deal with another platform.

The leverage in play for both creators is an interesting case study though, as they decide on their new homes.

On one hand, there’s an argument to be made that they lost some significant negotiating power by Mixer going under. Until now, top creators had been able to throw their weight around pretty heavily with the shared understanding that their name pull was enough to make ripples in the streaming world, whichever platform they chose to stream on.

Mixer upended this view. It was the first time a major player in the space publicly failed, and relatively quickly at that, showing the fragility of building a platform’s appeal around one or two creators.

On the other hand, you can argue that the whole ordeal has proven that only the top platforms can most effectively benefit from buying the top talent. 

With this in mind, they gain leverage in the discussions likely underway with Twitch and YouTube. Both platforms recognize the immense value the other will gain by signing (or regaining) this top talent.

Both platforms are at the stage where their talent acquisitions need only supercharge growth, rather than spur it from nothing. They’re already in the “$$$ + audience” position we talked about previously.

A move home to Twitch would regain a large portion of the audience they left behind last year when they migrated to greener (read: better paid) pastures, all while bringing back however many new fans they accrued on Mixer.

A shift to YouTube, though, is arguably more beneficial for both YouTube and the creators. Both streamers already have massive audiences on the site, and fans they left on Twitch who never made the jump to Mixer might be far more likely to make the hop to YouTube, where they’ll be greeted by an existing community on a site they almost all already use.

In line with the explosive growth of the passion economy in the last few years, so has the growth of the take that “power is shifting from platforms to creators“, and that remains true. 

That said, whatever the negotiations lead to, both YouTube and Twitch recognize the benefits either creator would receive on either platform.

In both cases, they’re returning to home turf, where their audience is already watching their content. What remains to be seen now though, is whether they return to their old streaming audience or their video audience.

Better yet, regardless of the outcome of the Ninja and Shroud deals, Twitch knows it stands as the presumptive new home for the majority of Mixer creators and existing audience.

As the go-to platform in the industry, it makes sense for most streamers to go to known ground, rather than venture afield to Facebook Gaming. The Mixer homepage as I write this is only further proof of this.

Each red block is a channel announcing a move to Twitch, rather than Facebook Gaming.

The Facebook Question

So where does Facebook Gaming fit into all of this?

Overall, Facebook comes out very, very well from this partnership. It will sign a number of existing Mixer partners to exclusive contracts on the platform, helping boost numbers, all while benefiting from the (albeit small) wave of Mixer streamers opting to move to Facebook Gaming rather than Twitch.

Moreover, though, Facebook wins on the advertising front.

As Mixer shuts its doors, it’ll take to Facebook a Rolodex of advertisers shifting their dollars from Mixer, to (hopefully) Facebook Gaming.

Moving to a known home with huge platform growth in recent months (don’t forget that +250% YoY growth), and best-in-the-business advertising tools, advertisers are likely excited to make the move to Facebook Gaming.

For Facebook, the deal is a perfect continuation of their ongoing growth efforts in both the advertising and gaming space.

As Facebook continues its gradual shift to becoming a media company beyond a social network, bringing new talent, new advertisers, and new viewers onto the platform is a win-win-win situation.

This deal helps Facebook Gaming further cement itself as a strong contender in the games livestreaming war.

Facebook’s entire business model is built on advertising and consumed media. Microsoft’s is built on neither.

In the last 10 years, Microsoft’s consumer media ambitions have faced some serious headwinds, and they’ve been quick to cut ties with projects that appeared to be sinking.

The Xbox One was initially marketed as more than ‘just’ a gaming console. It was supposed to be the media hub for the entire living room. A large focus point in the marketing of the Xbox One was its TV integration — the ability to route your cable box through your Xbox One, and benefit from all the extra features it could offer.

Until 2017, Microsoft had been pushing their own Groove Music, a music streaming platform, before ending it due to struggling figures, partnering with Spotify instead.

In the view of consumed media, Mixer’s demise seems somewhat in line with Microsoft’s previous attempts at expansions into the space.

Increasingly, it’s apparent that Microsoft is not interested in sinking the large costs in non-core operations when traction doesn’t come easily.

That sounds like armchair critique, but it’s not. Outside of Xbox, media isn’t a core focus for Microsoft. Shuttering underperforming non-core projects keeps more attention focused on their primary business.

Partnering with Facebook Gaming, though, does bring up the interesting question of xCloud, Microsoft’s unreleased cloud-to-mobile video game streaming (as in playing, not watching) project. 

This partnership allows Facebook to get front row seats and a powerful hand in controlling the integration of xCloud within their livestreaming platform.

Facebook is planning for the very near future, where you need only tap on a button as you watch a Facebook Gaming livestream, and you’re taken straight into the game you were watching, ready to be played on your device.

The advertising opportunities around this functionality will be powerful. The ability for in-stream ad spots driving directly to a playable demo of a game, with little to no time lag, will be a massive development for the platform.

For Microsoft, the deeper integration and reduced friction, putting their games and cloud gaming service in front of Facebook’s audience in the billions serve to go into end 2020 on a strong foot with the Xbox Series X launch — in fierce competition against Sony’s PlayStation 5.

With over 700M of the 2.5B monthly Facebook users having already engaged with gaming content, the move puts Microsoft front and center in accessing a massive addressable market.

The move helps Microsoft offload a large part of its operations, and therefore risk, in the consumer media space. This will help keep a more narrow focus on hardware and the gaming platform itself as xCloud gets closer to launch.

Microsoft is now free to focus on their core competencies, letting Facebook handle the rest.


So far, we’re 4,000+ words deep into exploring the past and present. It’s now time to look at the future for Facebook Gaming.

Until recently, Facebook’s gaming ambitions have been somewhat in line with those of other major gaming and media companies.

From their acquisition of Oculus in 2014, through the launch and expansion of gaming-oriented livestreams and a fully-fledged Facebook Gaming platform, Facebook has been playing the long game, slowly working its way into the ranks of the gaming top dogs, namely by having the immense pockets to bankroll each move.

More recently, Facebook has been rolling out its new Facebook Gaming standalone app. This, though, hasn’t been smooth sailing, with at least 5 rejections from Apple’s App Store — but that’s a story for another day, let’s focus on what Facebook is trying to do.

From the standalone app, Facebook Gaming allows users to “Go Live” with gaming content directly from their phones. Usually, streaming games requires a solid PC setup, bulky software, and hours of technical preparation.

By making game streaming more accessible to anyone, Facebook is slowly leaning towards the ‘casual’ gamer market — a much more accessible audience, and one already actively engaged with its platforms.

This opens the opportunities for Facebook to integrate the hyper-casual audience on even, say, Instagram, with deeper access to gaming services via xCloud, with near native integration between the platforms.

Mobile gaming has long been seen as the ugly duckling of gaming platforms, looked down on by ‘real‘ gamers (strong emphasis there) as not being a real game system. Twitch and YouTube Gaming do very little to cater to this non-PC and non-console audience. Facebook, then, is perfectly positioned to fill that void.

Twitch-style, ‘hardcore gamers’ aren’t the target market for xCloud, either. While it allows you to play games otherwise limited to consoles/PC on your phone with a controller, for most console and PC gamers, the appeal likely isn’t there for any intensive gaming sessions.

On the other hand, more casual gamers will be thrilled by the ability to play graphics-intensive, triple-A titles on their mobile device, without having to invest in a powerful PC, or a gaming console, both of which sacrifice portability.

This innovation would open the mobile gaming market to a new world of games previously reserved for the console/PC gamers, without many of the pricey purchases that go into it.

In integrating xCloud natively with the Facebook Gaming platform, obvious parallels appear with a 2015 internal memo by Mark Zuckerberg re: Facebook’s AR/VR strategy.

Gaming is critical but is more hits driven and ephemeral [than social communication and media consumption], so owning the key games seems less important than simply making sure they exist on our platform. I expect everyone will use social communication and media consumption tools, and that we’ll build a large business if we are successful in these spaces.

The exact focus, here, is different to the one Mark lays out in the document, here screen-based games rather than an AR/VR platform, but the strategy remains the same.

Rather than developing and owning the key games in the gaming space, Facebook is more interested in making sure they’re accessible via Facebook. In the AR/VR world, this means they’re playable on Facebook’s platform, but in our case, Facebook is at least getting close to this by making them easily accessible via Facebook Gaming, through Microsoft’s xCloud.

With this memo in mind, each step Facebook makes deeper into the gaming world can be seen in the context of their long-term augmented/virtual reality platform ambitions.

Time has shown us that Facebook is more than happy to play the long game, waiting for opportunities to present themselves to dominate their market.

Rather than throw money at a problem and cross their fingers hoping for overnight success, Facebook has a history of moving slowly but surely toward their goals, and Facebook Gaming is no exception.

Plenty of platforms are gunning for Twitch’s crown, but have so far fallen short. 

What if Facebook, though, isn’t going after Twitch at all?

Facebook has decided that it’s much easier to rule a world —here, the casual gaming world— that they themselves have created, rather than try to dethrone the beloved leader of another.

After all, as the saying goes, when you come at the king, you best not miss.

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