Microsoft is closing its Mixer service on July 22nd and plans to move existing partners over to Facebook Gaming. The surprise announcement means Mixer partners and streamers will be transitioned to Facebook Gaming starting today, and Microsoft will no longer operate Mixer as a service in a month’s time.

Microsoft has struggled to reach the scale needed for Mixer to compete with Twitch, YouTube, and even Facebook Gaming which has led to today’s decision. “We started pretty far behind, in terms of where Mixer’s monthly active viewers were compared to some of the big players out there,” says Phil Spencer, Microsoft’s head of gaming, in an interview with The Verge. “I think the Mixer community is really going to benefit from the broad audience that Facebook has through their properties, and the abilities to reach gamers in a very seamless way through the social platform Facebook has.”

Microsoft is partnering with Facebook to transition existing Mixer viewers and streamers over to Facebook Gaming in the coming weeks. On July 22nd, all Mixer sites and apps will automatically redirect to Facebook Gaming. Existing Mixer Partners will be granted partner status with Facebook Gaming, and any streamers using the Mixer monetization program will be granted eligibility for Facebook’s Level Up program. Mixer viewers with outstanding Ember balances, channel subscriptions, or Mixer Pro subscriptions will receive Xbox gift card credit.

Microsoft’s choice to partner with Facebook is clearly a strategic one that’s also related to broadening the appeal of its upcoming xCloud game streaming service and its overall gaming efforts. Microsoft will work closely with Facebook to bring xCloud to Facebook Gaming, allowing viewers to click and immediately play games that people are streaming. It’s a vision that’s very similar to Google’s ambitions with Stadia, but Mixer has lacked the scale and viewership to truly deliver this more broadly. Microsoft recruited exclusive streamers like Ninja and Shroud with big deals, but they haven’t been enough to get more people using the service over rivals. Ninja, Shroud, and other top streamers are now free to rejoin Twitch or stream on Facebook Gaming.

Microsoft faced a decision between ditching Mixer, selling it off, or even investing more money in without a guarantee it would hit the scale it needs to compete. “It wasn’t as much about return on sell, it was about finding a partnership that was the best things for the community and streamers,” explains Spencer. “We think this is it, and it gives us a great place to launch more xCloud content and give gamers the ability to play from there.”

Microsoft has talked about reaching 2 billion gamers with its vision for xCloud, but Mixer wasn’t in a strong enough position to help achieve that goal. “When we think about xCloud and the opportunity to unlock gameplay for 2 billion players, we know it’s going be critically important that our services find large audiences and Facebook clearly gives us that opportunity,” says Spencer.

It’s not clear exactly when we’ll see xCloud show up in Facebook Gaming, but it’s a key part of this new partnership. Microsoft is getting ready to launch xCloud streaming generally later this year, as part of the company’s Xbox Game Pass offering. “I don’t think we’re going to have to wait too long to see the outcome of the collaboration between the two companies to enable this tech for Facebook Gaming viewers,” reveals Spencer.

We’ve seen Microsoft give up on services in the past like Groove Music and partner with Spotify, but that partnership wasn’t exactly super close or meaningful to end users. Spencer sees this as the beginning of opportunities around gaming for Microsoft and Facebook. “The teams are physically actually close to each other, we’ve been to each other’s offices,” says Spencer. “You’ll see us continuing to grow this relationship... this will be the beginning of us seeing future opportunity together. I think we have a lot of alignment between the organizations on areas where the industry is going and how we can help each other.”

Microsoft will now keep hold of the technology that has powered Mixer and supported collaborative and low-latency streaming features. Microsoft Teams will start to use part of this Mixer technology in the future to improve real-time interactivity and low-latency streaming, and the Mixer developers involved in this will remain at Microsoft to help with the work on Teams. “Applying these fan-centric capabilities to new productivity experiences will create immersive ways for Teams to empower people, teams, and organizations to better engage in virtual gatherings at work and school,” says Spencer.