Microsoft makes its way into the live streaming game space (MSFT, AMZN)

Matt Weinberger/Business Insider

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In a move to bolster its Xbox division, Microsoft announced its acquisition of Beam, a live-streaming platform that allows users to watch and play video games with each other.

According to Microsoft, Beam will be integrated into Microsoft’s Xbox Live service – a subscription service for gamers to play and interact with other users – to make the platform more social and engaging.

Microsoft’s acquisition of Beam could help steal share from market leader Twitch. Amazon-owned Twitch, the pioneer in the live gaming industry, receives over 100 million monthly unique viewers, and 1.7 million monthly unique broadcasters.

Users view approximately 422 minutes of programming on Twitch, which is more than YouTube’s 291 monthly minutes, according to TechCrunch. While only a few months old, Beam has already accumulated a community of over 100,000 users and hopes to expand even faster with the help of tech giant Microsoft.

The acquisition could also strengthen its Xbox Live service. Unlike Twitch, which only allows users to view others playing video games, Beam offers the option for users to interact with their favorite gamers directly within the platform. The hope is that this added ability will increase engagement across the platform, and thus act as another incentive for its Xbox Live subscription service. Xbox Live saw monthly active users increase 33% year-over-year in Q2 and now touts 49 million monthly users, according to Microsoft cited by Variety.

Microsoft’s gaming business has been lagging lately. In its fiscal Q4 earnings release, Microsoft stated its gaming revenue decreased 9% to $152 million, largely brought on by lower hardware revenue. However, the company said this was mostly offset by higher Xbox Live subscription revenue. The acquisition of Beam could help bring in a larger, highly engaged community to help increase revenues in its gaming division, while mitigating losses from Xbox hardware sales. 

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