Skill based matchmaking is a term which refers to either players in a video game who are queued into a game with people of the same skill, or two people who are equally skilled or equal in some way which is usually used in a negative manner.
In an Xboxlive game with a Matchmaking system, and you enter with one more person that a team can hold, Its a game of roulette on who is on the other team.
GUY 1-"Ok, guys. Theres 5 of us going into a 4v4 playlist. Someone is going to be on the other team."