Wednesday, August 05, 2020
With Microsoft most likely taking a massive slice of Tiktok's western operations, how could the social network help Xbox?
Microsoft recently revealed that it is in talks to purchase a huge portion of Tiktok's western operations, notably Tiktok U.S., Canada, Australia, and New Zealand. Tiktok's Chinese owner Bytedance recently fell afoul of the Trump administration as part of on-going trade conflicts between the two superpowers. Concerns over how Tiktok's user data could be accessed by the Chinese dictatorial regime spearheaded the spat, which has effectively led to Microsoft's involvement, a trusted tech vendor of the U.S. military and government.
Microsoft stated on its official blog that Tiktok would continue to operate in a largely autonomous way, but Microsoft would come in to handle the data in accordance with U.S. regulations and enhance Tiktok's privacy provisions.
Related: Why Microsoft should buy Tiktok
My initial reaction to the purchase (which is likely to run in the tens of billions) was bemusement. Microsoft has an uncanny ability to run "fun" social platforms into the ground, with a headstart with Skype utterly squandered. At the same time, Discord came in and obliterated the platform, and of course, Mixer, which failed to keep pace with its rivals.
While the glacial pace of Skype's development and features is undoubtedly a worthy example of how Microsoft can fail to understand consumers, the fact Bytedance would largely continue to handle Tiktok's development gives the network a fighting chance of surviving Microsoft's dusty corporatism.
With that in mind, could Microsoft use Tiktok to leapfrog Amazon with Twitch and Google with YouTube and Stadia as a vehicle for Xbox's social potential? Let's explore a bit.
Twitch is tiny compared to Tiktok
It's not viable to compare Mixer, Twitch, and video game streaming to Tiktok. As the frontrunner in video game streaming, Twitch is still just a tiny fraction of Tiktok's daily active users, which stand at roughly 5 million daily active users vs. 50 million globally. Tiktok is a genuinely gargantuan platform, vastly outstripping many of its contemporaries in the space with rapid-cut content and high-volume video ads that make Bytedance (and soon, Microsoft) a ton of cash.
Tiktok is a truly gargantuan platform.
If (most likely when) Microsoft closes the deal with Bytedance, Microsoft will become a social media powerhouse overnight, with LinkedIn on the productivity side and Tiktok on the "fun" side, targeting younger audiences and general consumers. You know, like gaming does.
That said, Tiktok is primarily a platform where people share real-life videos. There isn't a ton of gaming content on there. Microsoft doesn't even have many official accounts on there (yet), with domain squatters taking their popular handles. Tiktok doesn't have a live streaming component either. Both of these aspects are possible areas of unexplored potential, particularly when you consider how Tiktok could help Xbox as a brand.
Microsoft's lack of social platform could hurt Xbox
Microsoft is on a mission to reach two billion gamers the world over and hopes to use improved access as the vehicle upon which to achieve that. Project xCloud and Xbox Game Pass will bring Microsoft's portfolio to tens of millions of Android devices in September, although whether or not the broader consumer market has an appetite for this remains wholly to be seen.
Tiktok could repair Microsoft's social blindspot here.
Whether game streaming takes off or not isn't the point here. Even on the off chance that it does, Microsoft needs to position itself to win this market segment ahead of some of its big tech company rivals, notably Amazon with Twitch, Google with YouTube, and Tencent with WeChat, QZone, and QQ. The exception in this list of companies with game streaming aspirations is Microsoft, which doesn't have a compatible social graph to tie Project xCloud into. LinkedIn is very work-oriented, Skype as a platform has slid into obscurity, and we all know what happened to Mixer.
Tiktok could repair Microsoft's social blindspot here, giving it a vast userbase upon which it can push game streaming. Google has already advertised how it plans to let users enter a game directly from YouTube videos via Google Stadia. There's no reason to think Microsoft couldn't do the same with Halo Infinite and Tiktok, promoting the game with ads on the service, while giving users the option to instantly jump into a free trial of Xbox Game Pass Ultimate cloud streaming on the very device they were using to browse cat memes. There's no reason Microsoft couldn't also leverage the technology it retained from its Mixer acquisition to bring live streaming to Tiktok as well, a feature conspicuously absent from the platform.
Intriguing potential
While I initially thought Microsoft's purchase of Tiktok was an odd move, if they left Bytedance alone to handle the development and curation of the platform at large, there's no reason to think they could screw up Tiktok in the same way they screwed up Skype. A lighter touch when it comes to integrated Microsoft's other platforms could help elevate Xbox without impeding Tiktok, which is an exciting prospect.
What do you think about Microsoft picking up Tiktok? Let us know in the comments.
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