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Microsoft Acquire Fortnite’s Biggest Star in Unexpected Move
Fortnite star Ninja has made a shock move to Twitch competitor Mixer, in a momentous exclusive media rights deal. This marks a massive upheaval for the Fortnite star who has developed a significant fanbase on Amazon owned Twitch of over 14.7 million followers. At his peak in 2018, Ninja saw a paying monthly subscriber count of over 250,000. Ninja’s popularity has waned, decreasing to around 15,000 subscribers paying either $5, $15 or $25 per month. Ninja has reportedly earned over $500,000 from streaming in his best month, with rumoured earnings in 2018 in excess of $10 million when you include advertising revenue, subscription revenue and sponsorships from Red Bull, Amazon and Fortnite. Ninja has already amassed almost 100,000 followers on Mixer, with over 120,000 channel views and Mixer are currently offering a free subscription to his channel, which will go live from his Red Bull Outpost at the Lollapalooza festival in Chicago.
Despite attracting the largest rumoured subscriber count on Twitch in 2018, Ninja has recently dropped from the top spot to 4th, behind streamers summit1g, tsm_myth and Shroud, with Ninja’s irregular streaming pattern blamed. As the streamer’s celebrity profile has increased, he has stopped releasing new content on a daily basis, which has turned off fans looking for near constant interaction with their favourite personalities. Ninja highlighted in a tweet that he lost over 40,000 paying subscribers over the course of a 48-hour quiet period whilst he attended a recent Fortnite tournament. This is a significant number of supporters to lose, with the cost of lost subscriptions estimated at over $100,000 per month. Although this is bad news for Ninja, those viewers are likely to have subscribed to a different channel, meaning that Twitch is unlikely to have felt much of a disturbance in revenue.
Ninja’s move to Mixer may prove to have more significant implications for Twitch. In the short term, the company may see viewership and subscription receipts decrease as dedicated fans follow the streamer to Mixer. In the long term, high profile deals such as this, which raise the awareness of Twitch’s competitors, is likely to improve the competitive balance in what is a heavily dominated landscape. Futuresource’s latest round of Kids Tech consumer research found that just 5% of children aged 3-16 who watch gaming streams had viewed content on Mixer, compare this with 32% for Twitch and it becomes clear the ground that Microsoft must make up. With the core gaming fanbase demographic traditionally 16-35-year olds, reaching younger audiences now will be the key to securing a lasting community and fanbase for the years to come.
Amidst concerns that Ninja has ‘sold-out’, there will no doubt be a large portion of his fanbase that don’t follow the streamer over to Mixer, with those fans finding new content creators to support on Twitch. Blevins also mentioned in his announcement video that the change of scenery would allow him to refocus his approach to streaming, so perhaps this will reinvigorate the waning interest in his videos. Although, the exact impact of his departure from Twitch is difficult to estimate precisely, if half of his 15,000 subscribers move over to Mixer, parent company Amazon would be looking at a direct revenue loss of approximately $38,000 per month. This may not seem like a big deal for the retailing giant; however, it sets the precedent for future streaming stars to diversify to competing platforms.
In an environment driven by the gaming community, exclusive rights to game content or popular streamers is a key element in securing support from the fans. Microsoft will be hoping that it can tap into this massive following in a bid to gain more traction in a market dominated by Twitch. Although no figure has been quoted regarding the value of this move, it is safe to say that Microsoft has dug deep in adding Ninja to their exclusive roster.
Microsoft is investing heavily in its entire suite of gaming related services, transforming its products into a self-contained gaming ecosystem. With Sony having traditionally outsold Microsoft in gaming console hardware, achieving a global market volume share of 78% in 2018, it will be an important strategy for Microsoft to develop its accompanying services to bolster demand for the Xbox One and upcoming Xbox ‘Scarlett’. With the next generation of consoles expected to have similar hardware specifications, Microsoft will be looking to develop a strong value chain of other services to attract consumers to its platform. Project xCloud and the Xbox Game Pass (and now Mixer) appear to be significant focuses for Microsoft moving forward, as it looks to redress the sales deficit against Sony and the looming challenge from the Google Stadia.
Overall, this shakeup is expected to have a positive influence on the gaming industry, with the game streaming status quo seeing its first major challenge since the industry has gained mainstream attention. Although Twitch is expected to continue to dominate the market in the near future, exclusivity deals such as this will increase both competition amongst streaming websites and mainstream awareness of game streaming. This is one of the first pieces of tangible evidence of gaming companies putting greater emphasis on creating gaming culture, than on hardware specifications and software releases in marketing their new generation of products and services.
Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.