Microsoft has, in the past, operated unprofitable businesses viewed as important to the overall company.
Microsoft plans to promote the Xbox Series X console and the xCloud streaming service, expected later this year, and it's still building up the all-you-can-eat Xbox Game Pass business, which recently passed 10 million subscribers. "So we're shifting our focus to deliver upon that vision." "It became clear that the time to grow our own livestreaming community to scale was out of measure with the vision and experiences we want to deliver to gamers now," a Microsoft spokesperson told CNBC in a statement. It also paid prominent streamers to join Mixer and ditch Twitch. Last year, Microsoft went further, adding a virtual currency called Embers that audience members could buy to display stickers in chat messages. It added support for many languages and developed a way for people to buy games that they were watching streamers play. It wove Mixer into the Game Bar on Windows 10 and delivered a Mixer app for Microsoft's Xbox One console, making it easy for gamers to broadcast their play sessions. Microsoft tried various tactics to help Mixer grow. It delivers video streams using a protocol called faster than light, or FTL, which promises speed so rapid that streamers can instantly respond to what audience members are telling them in chat messages.
"Live video makes no sense from a unit economics standpoint," said Matt Salsamendi, who helped start Beam in 2014 and left Microsoft last year, in an interview. Even the co-founder of Beam said Nadella was making the right call when considering Microsoft's bottom line. Microsoft is giving up on a growing market at a time when it's promoting other gaming products like Xbox consoles and popular online game Minecraft.
The outcome represents a stumble for Satya Nadella's Microsoft, whose stock has multiplied fivefold since Nadella succeeded Steve Ballmer at the helm in 2014.
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