The Twitch Revolution

Not just a little game

Video games are big money and so too are videos of people playing video games. 517 million people watch Gaming Video Content (GVC) each year on Youtube alone, easily dwarfing the users of Spotify, Netflix and ESPN combined.

However, consumption of GVC has shifted in recent years from pre-recorded videos towards live content, with the emergence of platforms like Twitch in 2011 (purchased by Amazon for $970 million in 2014). Ever improving technology allows tens of thousands of people to simultaneously watch one person play video games, often beamed live from the comfort of the streamer’s bedroom. Financial pressures have also shifted content creators towards live streaming which can be far more lucrative, particularly for creators with smaller audiences. Twitch, despite being a free to view platform, generates significant revenue from advertising, sponsorship deals, viewer donations, and audience subscriptions to individual channels. This has allowed Twitch to generate more GVC related revenue than YouTube despite having a far smaller number of viewers. YouTube has responded to this upstart by investing heavily in its own live streaming capabilities, although it still lags behind.

 

New technology breeds new culture

Technology has created a society that is simultaneously better connected and more physically isolated, so it is natural that individuals seek alternative forms of human interaction and identity.  Stream chat windows allow the audience to communicate with the streamer and other audience members in real time. This interaction has spawned a unique viewing culture. This culture has its own language and symbols that are as baffling to outsiders as the offside trap is to those who hate football. For example sarcastic messages are marked with an emoticon known as “Kappa”, a small picture of Josh DeSeno one of the programmers who helped create Twitch, by 2014 the “Kappa” was being used 900,000 times per day. It is often spammed in chats to troll or mock the streamer, usually in an entirely good natured fashion.

These emoticons are also markers of identity for audience members as they can attach emoticons to their name in chat, akin to wearing a sports team’s colours. Indeed each streamer frequently has emoticons that are unique to their channel, often linked to the streamer themselves or something they are famous for. Two streamers “Ninja” and “Waffle” employ unsurprisingly eponymous emoticons for their subscribers to use.

Basement geeks no longer

For many years the GVC industry was built on ad revenues, which had grown steadily overtime. However, a number of scandals among high profile YouTubers and streamers has led to stagnation in the growth of ad revenues. PewDiePie, the world’s most popular YouTuber, was earning $30 million a year before being accused of racism in early 2017 which led to many companies, including Disney, to cut ties with the 28 year old Swede.

This has led to greater revenues being sought directly from viewers, whilst maintaining free to view platforms. These come in the form of subscriptions and donations. The stereotype of gamers as young, unemployed, and pimply men living in their parents’ basement no longer has any basis in reality. Women make up 46% of viewers and the average income of a GVC viewer in the US is $58k. Tapping into this wealth and engaging with this new gamer culture allows streamers to generate significant revenues, 44% of US viewers spend at least $21 a month. With an audience of young, tech savvy and wealthy individuals, companies would smart to see where the much of the future of entertainment lies.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s