Microsoft CEO Satya Nadella speaks to participants at the Viva Technologie exhibition held at the Porte de Versailles Exhibition Center in Paris, France on May 24, 2018. The new international event Viva Technology brings together 5,000 start-ups with top investors, companies that develop businesses, and all the digital transformation participants that shape the future of the Internet.
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In terms of cloud computing and the recruitment of top technical talent in the Seattle area, Microsoft will go hand in hand with Amazon. However, in terms of live video games, Microsoft is withdrawing from Amazon̵
Four years after Microsoft bought Beam, a game streaming startup, and renamed it Mixer, Microsoft last week said it would stop operating the service in July and encourage users to adopt similar services from Facebook. Many users chose Twitch, which was a competitor acquired by Amazon in 2014 for nearly $1 billion. According to a recent analyst estimate, the value is now about $15 billion.
The result is a stumbling block for Satya Nadella’s Microsoft. Since Nadella took over at the helm of Steve Ballmer in 2014, Microsoft’s share price has been Increased five times. Even Minecraft, the co-founder of Beam, said that Nadella made the right choice when considering Microsoft’s bottom line.
“From the perspective of unit economics, the live video is meaningless,” said Matt Salsamendi, who helped found Beam in 2014 and left Microsoft last year.
Blender is an expensive operation. It uses a protocol called “light speed ratio” or FTL to transmit video streams. The protocol promises speed so fast that the ribbon can immediately respond to what the audience tells them in the chat message.
Microsoft has tried various strategies to help Mixer grow. It weaves Mixer into the game bar on Windows 10 and provides the Mixer application for Microsoft’s Xbox One console, allowing gamers to easily play their game sessions. It adds support for multiple languages and has developed a method for people to buy games to watch live programs.
Last year, Microsoft went further, adding a virtual currency called Ember, which viewers can purchase to display stickers in chat messages. It also paid for famous ribbons to join Mixer and Twitch.
After the corona virus attack earlier this year, the lack of mixers in the market became insurmountable. A report from real-time streaming software companies StreamElements and Lightstream shows that in April, consumers and Twitch spent 1.5 billion hours watching Twitch due to the closure of offices and schools in most parts of the United States and around the world, double the same period in 2019. At the same time, the use of the mixer was 37 million hours.
A Microsoft spokesperson said in a statement: “Obviously, the vision and experience we want to provide to gamers now cannot expand our own real-time streaming community for expansion. “Therefore, we are shifting our focus to realizing this vision.”
Microsoft plans to promote the Xbox Series X console and xCloud streaming service later this year, and it is still building the Xbox Game Pass business it can do as it pleases, which recently attracted 10 million subscribers.
In the past, Microsoft operated unprofitable businesses that were critical to the entire company. For many years, Microsoft’s Bing search engine has been losing money, but it started to make money in 2015. Microsoft acquired LinkedIn in 2016 for $27 billion, but the company has been losing money in 2018. This is the largest acquisition the company has ever made, and it represents a long-term bet.
The scale of Beam’s acquisition is so small that its performance will not have a significant impact on overall revenue. Compared with the acquisition of aQuantive in 2007 and Nokia’s equipment and services business in 2013, this is more palatable for investors. The costs of the two companies were $6.3 billion and $9.5 billion, respectively. These transactions have resulted in significant writedowns.
Analysts said that in this case, Microsoft is conducting a cautious financial conference call. A few days after the announcement to close Mixer, Microsoft said it would close its global physical stores. In a note to customers on Friday, both Stifel’s Brad Reback and Adam Borg made sense.
The analyst wrote: “Net/net, we believe this move, coupled with Microsoft’s decision to abandon the Mixer (video game live streaming platform) earlier this week, continues to demonstrate the company’s commitment to not chase large sums of money “” has a buy rating on stocks. They added that Microsoft could focus on “investing in higher growth opportunities.”
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