Perhaps you haven’t heard, but e-gaming is big business ($68 billion in 2018, growing by various estimates from 10% to 20% CAGR). Alongside e-gaming has come video-game streaming. The numbers have spiked somewhat during the global lockdown, but they were big even before — in 2019 there are about 12.5 billion hours watched across the four biggest services. With numbers that big, and Microsoft’s existing success in the gaming space with Xbox (and, lest we forget, PC games), it’s no surprise that it wanted in on the streaming side. In 2016 it acquired Mixer, and last year made a big play to challenge the supremacy of Twitch (YouTube also has a vibrant video-game-streaming market, but Twitch is dominant in this space) by spending big money to bring over some of the biggest streamers. This week, they announced they’re shutting down the service, and partnering with Facebook gaming. I’m not sure what Microsoft’s strategy is here, but it may be as simple as they weren’t winning — a GE-esque “if we can’t be number one or two, we’re not going to play”. While Mixer’s growth was good (149% YoY 2018 to 2019), that still left them about tied with Facebook gaming, for a very distant third place (Mixer and Facebook each held 3%, compared to YouTube’s 21% and Twitch’s 73%). It’s also possible that those numbers got much worse. COVID lockdown has been driving phenomenal acceleration of growth in the space, with Twitch hitting 1.7 billion minutes in May alone. But of course, companies the size of Microsoft don’t turn on a dime, so this must have been in the works for some time. It’s curious that in less than a year, they went from spending millions of dollars on guaranteed contracts to launching a partnership with Facebook (even negotiating that partnership must have taken many months, so this really did have to be done at the strategic level). One also wonders at the apparently disconnected, but equally strategic announcement this week that they’re shutting their retail stores. Normally the big tech companies don’t do much that’s exciting, but with these two significant strategic changes, one should keep on eye on what they start doing at Microsoft.