Microsoft Beefs Up Its Video Game-Watching Platform to Rival Twitch

(Bloomberg) -- If you're a gamer under the age of 25, chances are you spend as much time watching other people play video games online as you do playing games yourself.

That's why Microsoft is beefing up its Mixer video-game streaming service, which lags larger rival Twitch, owned by Amazon.com Inc. Mixer, which works with Xbox and Windows, is rolling out a new series of features starting Thursday, including more internal currency options and ways for users to pay their favorite streamers. 

“We see game video as this huge medium,” said said Chad Gibson, general manager of Mixer.  “We see an increasing amount of gamers' time away from actually playing games -- talking to friends online and increasingly watching video. For  gamers who are 18 to 24, the portion of game watching where they are not playing is much higher.”

Mixer already allows multiple players to stream together. It has a channel called “HypeZone” that uses artificial intelligence to scan matches of last-man-standing games like Fortnite that are down to their final stages and shows them to thousands of viewers. Not quite 18 months after its release, Mixer attracts 20 million users a month, Gibson said. These kinds of platforms are drawing $500 million a year in ad revenue, with Twitch making up $300 million and the rest fragmented between other services, said Michael Pachter, an analyst at Wedbush Securities. “Mixer is way behind, but the market is so small that they may have a chance,” he said.  “However, Twitch is Amazon, so they are a formidable competitor.”

To draw more interest, Microsoft is giving viewers a way to give cash rewards to streamers through two different Mixer currencies.

Users gain one currency, called “sparks” by watching streams. The other, “embers,” they pay cash for. They can use them to buy stickers, gifs and interactive graphics like fireworks. Every time a viewer uses one of these effects to react to someone's stream, the player gets a financial reward. 

Providing opportunities to streamers to make money helps Microsoft lure creators to Mixer.

“It comes down to who controls the audience, and popular `casters' can be lured away with more generous offers,” Pachter said. “Right now, Twitch has the eyeballs and their casters make a lot of money. If Microsoft wants to pay up, they can catch up.” 

©2018 Bloomberg L.P.