Microsoft (MSFT) showed stellar results in its fiscal fourth-quarter 2019 (the quarter ended in June 2019) earnings. The software maker saw strong growth in most segments.
A strong earnings report but negative gaming growth
However, the only unit that saw negative growth was Microsoft’s gaming division. The company said that gaming segment revenue fell 10% year-over-year during the fiscal fourth quarter.
Understandably, the computer giant wants to change that. In a big move earlier this month, Microsoft’s streaming platform, Mixer, stole the extremely popular streamer and professional gamer Richard Tyler Blevins, better known as Ninja, from Amazon’s (AMZN) Twitch.
Microsoft’s Ninja acquisition caused downloads to sky-rocket
Mixer, which the software giant got three years back, accounts for a small portion of the online game streaming platform.
Meanwhile, Amazon’s Twitch is the most popular platform and benefitted from the fast-growing eSports space, as more and more people enjoy watching pros play their favorite games. While losing Ninja is a small blow for Twitch, it won’t dent Twitch’s viewership much as it has millions of broadcasters. However, Ninja’s exclusive partnership with Mixer is a massive gain for the streaming platform.
Roping in Ninja was huge for Microsoft’s Mixer. The deal immediately caused the number of Mixer downloads to increase. According to SensorTower, Mixer’s app downloads doubled after the news. The app research firm estimated that it would add at least 100,000 users or 25 times more users in one week.
The deal could trigger competition between Microsoft and Amazon
While Mixer remains a much smaller platform compared to Twitch, the poaching of Ninja could eventually trigger a streaming war between the two platforms in a fast-growing space.
Mixer announced last month that it will soon start monetization features to all accounts. However, it will take awhile before the software giant starts bringing in meaningful revenue through Mixer. That said, signing up Ninja gives Mixer a massive boost.
Microsoft stock up after investing in new sector
As mentioned before, Microsoft is investing in a sector that is growing very quickly. In the long term, this will help the company boost gaming revenue. Meanwhile, Microsoft is well-poised to take advantage of this trend, which could boost its earnings for years.
Microsoft’s stock is up 35% year-to-date. The company has a market cap of over $1.03 trillion and is the world’s most valuable public company.