A system for managing audio chat sessions for online video games or applications comprising: an online video game or application execution engine configured on a server to execute an online video game or application on the server in response to input from one or more users of the video game or application and to responsively generate audio and video of the video game or application; a video compression module for compressing the video received from the online video game or application, the compressed video transmitted from the server to the one or more users of the video game or application over a network and further being transmitted to one or more spectators of the video game or application over a network; and a chat subsystem to establish audio chat sessions with the one or more users and one or more spectators to the video game or application, the chat subsystem establishing a plurality of audio chat channels including a spectator channel over which the spectators participate in audio chat and a user channel over which the users participate in audio chat; characterized in that, for a particular audio chat channel, the chat subsystem receives packetized audio streams from each of the users and/or spectators associated with that audio chat channel, selects portions of audio from the packetized audio streams based on a specified selection criteria, mixes those portions of audio from the packetized audio stream to produce a mixed audio stream for the particular audio chat channel, and transmits the mixed audio stream to each of the users and/or spectators associated with the particular audio chat channel, the selection criteria comprise a specified energy threshold associated with the audio contained in the packetized audio streams and the chat subsystem determines if audio contained in an audio packet received from a particular user and/or spectator is above a specified energy threshold and if the audio contained in the audio packet is above the specified energy threshold, then the chat subsystem continues to mix the audio with audio from other users and/or spectators for the mixed audio stream and if the audio contained in the audio packet is not above the specified energy threshold, then the audio packet is dropped, wherein audio from the video game or application is mixed with the packetized audio streams from each of the users and/or spectators associated with the audio chat channel and different priority levels are assigned to audio chat channels of users and spectators to provide higher priority levels to users over spectators, wherein packetized audio streams with higher priority levels are processed ahead of packetized audio streams with lower priority levels to reduce latency of audio packets with higher priority levels. an online video game or application execution engine configured on a server to execute an online video game or application on the server in response to input from one or more users of the video game or application and to responsively generate audio and video of the video game or application; a video compression module for compressing the video received from the online video game or application, the compressed video transmitted from the server to the one or more users of the video game or application over a network and further being transmitted to one or more spectators of the video game or application over a network; and a chat subsystem to establish audio chat sessions with the one or more users and one or more spectators to the video game or application, the chat subsystem establishing a plurality of audio chat channels including a spectator channel over which the spectators participate in audio chat and a user channel over which the users participate in audio chat; characterized in that, for a particular audio chat channel, the chat subsystem receives packetized audio streams from each of the users and/or spectators associated with that audio chat channel, selects portions of audio from the packetized audio streams based on a specified selection criteria, mixes those portions of audio from the packetized audio stream to produce a mixed audio stream for the particular audio chat channel, and transmits the mixed audio stream to each of the users and/or spectators associated with the particular audio chat channel, the selection criteria comprise a specified energy threshold associated with the audio contained in the packetized audio streams and the chat subsystem determines if audio contained in an audio packet received from a particular user and/or spectator is above a specified energy threshold and if the audio contained in the audio packet is above the specified energy threshold, then the chat subsystem continues to mix the audio with audio from other users and/or spectators for the mixed audio stream and if the audio contained in the audio packet is not above the specified energy threshold, then the audio packet is dropped, wherein audio from the video game or application is mixed with the packetized audio streams from each of the users and/or spectators associated with the audio chat channel and different priority levels are assigned to audio chat channels of users and spectators to provide higher priority levels to users over spectators, wherein packetized audio streams with higher priority levels are processed ahead of packetized audio streams with lower priority levels to reduce latency of audio packets with higher priority levels.