Without Mixer is Microsoft’s entire gaming strategy weakened?

Well, that was a surprise.

Microsoft, in a single announcement, effectively ended its foray into the world of live streaming. Last night the company put up a blog post waving a white flag and instead pivoted into a strategic partnership with the newly relaunched Facebook Gaming – which is having its own spat with Apple apparently.

In a lengthy blog post, Phil Spencer set out the reasons for the move: “It became clear that the time needed to grow our own livestreaming community to scale was out of measure with the vision and experiences we want to deliver to gamers now, so we’ve decided to close the operations side of Mixer and help the community transition to a new platform.”

The outcry on Mixer was loud and painful to see. Never before has such a significant and well-funded live streaming service been the recipient of its P45 while live on air. The results were predictable, but no less terrible to behold, streamers cried or raged or just shutdown mid-stream, as the bombshell went off live and on camera.

Partners, streamers and communities now have one month to transition to Facebook Gaming if they wish. Though many will undoubtedly move the other way to Twitch. Star names, such as Ninja and Shroud, will be free to choose their next move, starting another bidding war between the three remaining notable players for their services.

It remains to be seen whether the larger mass of streamers on the platform, most of whom moved over from Twitch to look for fresh pastures, will be drawn back to that channel, or whether Facebook Gaming or YouTube Gaming will be able to offer them something better. Either way, Microsoft will be dealing with them at arm’s length once again.

Microsoft bought Mixer, then called Beam, back in 2014. And it certainly looked to be a key pillar of its gaming strategy, something it was willing to invest serious money into, in order to build technology and audience there. But despite those ambitions, it couldn’t achieve the scale it wanted in a reasonable timeframe.

Xbox’s strategy of late has looked very well thought out. Studio acquisitions, evolving hardware, backwards compatibility, Game Pass, and eventually Project xCloud to complement all of that, it all made sense and was forward-looking.

“It became clear that the time needed to grow our own livestreaming community to scale was out of measure with the vision and experiences we want to deliver to gamers now”

Now, this move doesn’t fatally undermine any of that, but it was easy to see the upside in marketing and community building of having your own streaming platform, more so for Microsoft than for say Amazon. It remains a surprise that Microsoft didn’t buy Twitch itself, and it’s not likely to ever get the chance now.

One area where Mixer would have been most useful was in collaboration with xCloud, with the possibilities, and technical challenges, faced by the two platforms having considerable overlap. Microsoft obviously retains Mixer low-latency technology, but it loses its audience and the potential to bring them into the xCloud platform, something it will now have to work on with partners – most notably Facebook Gaming it seems.

Microsoft was certainly right to attempt to take a share of this market and its failure doesn’t reflect badly upon it, sometimes these things just don’t work out, it certainly had a solid plan. The question is how much will the end of Mixer affect its future plans?

That largely depends on how well it can utilise its Facebook partners. Stadia complicates Xbox’s relationship with YouTube, and for similar reasons, the rumours around Amazon/Twitch launching its own cloud gaming initiative look likely to have put paid to any such hookup there.

That leaves Facebook as the best partner available. And frankly I’d back Xbox/Facebook over Stadia/YouTube or Amazon/Twitch if you’re looking at who will end up with the most profitable combined gaming ecosystem, even if ownership of that is split between the two companies.

All of which brings us around to Sony, the reigning console champion, but a company that traditionally concentrates on hardware and triple-A game development, rather than platform building and online technology. Arguably the kind of content that Sony creates isn’t the bread and butter of either streamers or game streaming services.

That said, a partnership between Sony and say Amazon would make a lot of sense, allowing for some amazing marketing connections, but the recent announcements of a strategic partnership between Sony and Microsoft only makes clear how complex the landscape is behind these consumer-fronted brands.

In short, Microsoft and Facebook can work well together, and Microsoft is right to select a strong partner rather than try to build its own platform in an uphill struggle. But it’s hard to gauge the import of this move until Amazon, and possibly Sony, show their hands, in what must surely be a more connected future.