Encoder

Everything between your capture devices and the platform goes through it. The encoder takes raw video and audio, compresses them to a target bitrate and resolution, then pushes the result to an ingest server using a protocol such as RTMP or its secure version, authenticated with your stream key.

Software encoders run on the same machine as your game or scene layout, which is cheap and flexible but competes for processing power. Hardware encoders are separate boxes that do only this job, so a heavy scene cannot drop your frames. Most dropped frames and stutter come from upload bandwidth or an over-ambitious bitrate rather than the encoder itself.