Can Project xCloud save Microsoft’s Mixer, or will it become another Windows Phone?

It’s now been almost three years since Microsoft purchased Mixer, originally named Beam, to grab its share of the video games streaming after losing juggernaut Twitch to Amazon. At the time, Microsoft claimed that Beam’s unmatched “Faster than Light” streaming protocol delivering sub-second latency had no real competition, but it’s clear now that FTL wasn’t really the killer feature to help Beam/Mixer catch up to Twitch, YouTube Live, and even Facebook Live.

Following the failure of Windows Phone, Groove Music, ebooks on the Microsoft Store and other consumer-focused initiatives, you would think that Microsoft might want to stay away from me-too products with no following. However, the main purpose of Microsoft’s acquisition of Mixer may well have been the company’s low-latency streaming technology, which could really have its use for Microsoft’s upcoming Project xCloud game streaming service. Mixer already lets streamers share their controller with viewers on Xbox One consoles and Mixer.com, and it’s a pretty fascinating feature.

Following the Mixer rebranding, the platform has evolved quite a lot and added interesting gamification features and new ways for streamers to make money. However, it’s still not clear if the service is actually sustainable, especially when most video games enthusiasts still see Twitch as the only platform where you can really make it big as a streamer.

Mixer is showing some signs of growth, but Microsoft may need to make some big changes to the service if it wants Mixer to leave its mark in the video games industry.

Mixer is growing, but not fast enough

Since Amazon acquired Twitch and started to offer “Twitch Prime” goodies to Amazon Prime subscribers, the service has pretty much become an unstoppable juggernaut. According to the latest data from Stream Hatchet (via StreamElements), over 2.7 billion hours of live streaming content was viewed on Twitch during Q2 2019, and that represents over 70% of Iive hours watched during the period. YouTube came second with 19.5% of the pie (735M hours), ahead of Facebook Gaming (5.3% and 197,7M hours). Mixer had just 3% of live hours watched at 112M hours.

That 3% sounds a lot like Windows Phone’s market share back in the day, but Mixer has some fresh data to prove it’s doing  pretty well. “Since Mixer’s launch in May 2017, the total number of hours that viewers have spent watching content each month has grown nearly 17x – that’s based on an average growth rate of more than 12% each month for the past 25 months. Of course… we’re not done yet,” the Mixer team said in a blog post yesterday.

When you start with a very small userbase, the explosive growth numbers that Mixer is boasting about don’t really mean much. Moreover, focusing on hours watched probably isn’t the best metric to focus on, especially if these users are not actively participating in chat or other “Mixplay” activities.

Actually, many Mixer streamers with a huge following have been complaining about the site being a virtual ghost town. If you believe these tweets, it’s apparently remains much easier for streamers to get more viewers on Twitch, even for those who don’t have a lot of followers on their channel.

Mixer needs more “active” users

From the own words of Mixer’s co-founder Matt Salsamendi, passive viewers isn’t what Mixer or any other video platform needs to make money, especially when ads are involved. Mixer doesn’t have ads yet, but here’s what Salsamendi had to say about the topic in a Reddit thread from two weeks ago:

I just wanted to add some industry context– idle viewing time (even real people) is bad for an ads business. CPMs ($s generated from advertising) is dependent upon engagement rates (and other factors) with ads. The last thing an ad partner wants to see is millions of empty impressions. Our goal is to incentivize *active* engagement, but we have done a poor job so far. We’ll keep working on this problem, but we have to address it systemically (i.e. making sure our spark algorithm rewards *meaningful* engagement with streamers).

So yes, Mixer needs more “active engagement” before it can roll out ads on the platform, and that’s what the new Channel Progression feature is all about. Viewers can now be rewarded when watching streams, engaging with others in chat, subscribing to channels, and more, but these gamification features also have some downsides.

One of Mixer’s biggest problems may be the proliferation of “Spark farms,” which are 24/7 streams with no actual gameplay. These channels usually get a lot of viewers because watchers earn sparks, a free currency you can spend on skills and MixPlay to interact with a stream. One of the most infamous spark farm is probably a channel called TheGandalfShow, where you can see a loop video of actor Ian McKellen as Gandalf headbanging to the music from the Epic Sax guy meme. When this channel and others hold top spots on Mixer, this really isn’t a good look for the service.

Sparks farms are proliferating on Mixer.

It’s not clear what Mixer can do prevent the proliferation of sparks farms, and maybe the company has no real interest in doing something about it. Actually, the company kind of have its own sparks farms with its 24/7 ChannelOne and ChannelOnePlus channels, where viewers can earn bonus sparks by watching select Mixer partners.

Can the new community-first approach encourage future growth?

Earlier this week, Microsoft announced two major news for Mixer streamers. First of all, all streamers will soon be able to monetize their channels, starting with Mixer Embers (a paid currency on Mixer), followed by channel subscriptions, as well as “additional monetization features” the company has yet to reveal. Channel subscriptions currently require streamers to reach Partner status, and it’s worth noting that Mixer currently gives additional ad revenue to partners even though the platform still has no advertisement service in place.

Here’s what Mixer co-founder’s Matt Salsamendi recently said about this experimental “synthetic ad revenue” on Reddit:

We started running a few experiments on ads recently. Our partners already receive what we call “synthetic ad revenue”, basically, we pay as though their viewers see ads (even though they don’t) to make up for the missing revenue in the mean time. Ads are part of the “long term plan” but no immediate announcements yet.

Put simply, Microsoft is essentially bankrolling Mixer as of today, and after laying off some of the Mixer original programming staff last month the platform will now rely more on partnered streamers to do the heavy lifting. Right before the layoffs, Mixer managed to get Ray “Stallion83” Cox, the worldwide leader in Xbox achievements and Gamerscore, to abandon Twitch for Mixer last month.

So far, Cox managed to reach 5K followers on his Mixer channel and 44,685 total views as of this writing, while he had 35K followers on Twitch and more than 1 million total views. We wish Cox the best, but the hardcore Xbox fan certainly lost a significant part of his audience by moving to Mixer.

There are other big names on Mixer, including Snoop Dogg and his “Gangsta gaming league.” The American rapper and his team mostly stream some Madden NFL 19 and NBA 2K19 gameplay, and the sometimes smoke-filled streams may not always be the family-friendly content Microsoft wants to promote on Mixer. Anyway, Mixer is still welcoming all type of streamers, though the company just announced a new toxicity screen program meant to protect streamers and viewers from abuse.

“We are already hard at work on several new programs and tools aimed at reducing harmful content and toxic behavior so that Mixer continues to be a fun, positive and welcoming community,” the Mixer team said in the announcement. If that sounds like a good thing to do, with tight supervision of abuse, it may become hard for Mixer to gain more traction. Truth be told, YouTube, Twitch, and other video platforms were built in part on toxic creators who have built a massive audience over the years, and even the most popular video games streamers such as Ninja or Dr Disrepect now seem to get some sort of special treatment when they really screw up.

It’s certainly important for Mixer to have some mechanisms in place to prevent abuse, but fighting trolls is pretty much a Sisyphean task. And sometimes, the best way to fight troll is to have some sense of humor. Just watch and learn:

Mixer needs to support more platforms, including Project xCloud

Mixer is pretty much front and center on the Xbox One dashboard, something that’s probably irritating for users who have absolutely no interest in the service. Still, it looks like Mixer is less Xbox dependent than expected, if we believe what Mixer’s co-founder Matt Salsamendi said on Reddit:

With this focus on streamers, we are focusing on expanding strongly beyond just the console, with strong roots on PC and mobile. Even today, the majority of our traffic is not console, but still a road we are on. I think critical to that is an increase in variety of content, I hope we can live in a world where you don’t feel pressured to play a top 5 game to be successful, it’ll be a long journey!

Interestingly, Microsoft announced earlier this week that it was killing its Mixer Create apps for iOS and Android, which allowed users to stream mobile games or do Periscope-like livestreams. Mixer remains built in on Xbox One and Windows 10, but there’s still no easy way to stream on Mixer from a PlayStation 4 or Nintendo Switch. That’s definitely a missed opportunity for Mixer, but what the service will really need is a deep integration with Microsoft’s Project xCloud game streaming service.

As you may know Google’s Stadia game streaming service will have deep synergies with YouTube: When playing a Stadia game, Google will send the stream to both you and your YouTube channel simultaneously, and giving you the choice to make the YouTube livestream public or not. Game developers will also be able to support interactive features such as “Crowd Play,” allowing the audience of a multiplayer game to jump in (or queue up) and play with the streamer without needing to install anything. Another Stadia feature called “State Share” will allow viewers on YouTube to pick up where a Stadia streamer left off in a game that supports State Share.

Witch Crowd Play, YouTube users will be able to jump into multiplayer games streamed from Google’s Stadia service.

These synergies with YouTube are exactly why Microsoft and other video games companies shouldn’t underestimate Google Stadia. We hope that Microsoft is working on similar integrations between Mixer and Project xCloud, but so far we have very few details about the latter. Microsoft said during E3 that the upcoming public beta for Project xCloud would focus on phones first, but we still don’t know if it will possible to stream xCloud gameplay on Mixer, Twitch, or other streaming services.

As a pure game streaming service, it’s safe to assume that Mixer will never catch up to Twitch or YouTube, much like Windows Phone could never catch up to iPhone or Android. This ship has sailed, and if Google is already making all the right moves to integrate Stadia with YouTube, we also know that Amazon is currently working on its own game streaming service. It would be very surprising if this new offering doesn’t have deep integrations with Twitch, and that’s one more reason for Microsoft to get its Project xCloud/Mixer combo right.

Microsoft is currently investing heavily in Mixer, but the company has also shown in recent years that it’s ready to kill unpopular products when necessary. Even though the company has yet to say so, Mixer’s future looks increasingly tied to the success of Project xCloud, which is Microsoft’s solution to reach the 2 billion gamers worldwide. With Google Stadia officially launching in November, Microsoft really shouldn’t wait too long to reveal what role Mixer will play in the company’s cloud gaming strategy.

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