How watching other people play video games took over the world

How watching other people play video games took over the world
Image: Nick Little for Quartz
We may earn a commission from links on this page.

Some parents roll their eyes when they hear the sound of their kids booting up an Xbox or Playstation console. Rachel Hofstetter’s mom, however, encouraged her daughter to play video games from when she was young. It turned out to be a smart decision.

Hofstetter loved video games so much that she got a job at GameStop as a teenager. She started posting photos of new game releases to her Instagram and soon developed a small following. Eventually her followers asked her to live-stream on a platform called Twitch. She didn’t really know what she was doing—few did, in fact. At the time, Amazon had recently bought the service, and it would be several years before it would take over the world.

She quit her job at GameStop in 2015, and, at 23, pivoted to streaming full time later that year. Her small community of supporters became a big one. A big community became a fan base. A fan base became an army. Today, she’s known as Valkyrae and streams on YouTube, where she has 3 million subscribers.

“I feel I haven’t changed,” Valkyrae told Quartz. “My community is as supportive as ever before. Just much larger.”

Valkyrae is one of many celebrity video game streamers to leverage their massive communities into seven-figure paydays through exclusive contracts with platforms, endorsement deals, and more. The global video game industry is worth nearly $200 billion annually. Live-streaming on platforms like Twitch and YouTube is a small but rapidly growing part of that, transfixing a generation of consumers who grew up on the internet. They couldn’t care less who wins the Academy Award for best picture next month. They want to know if Valkyrae can win her next match of Among Us.

Watching other people play video games is not a niche or passing fad. It is mainstream entertainment, as big as, and often bigger than, traditional experiences like moviegoing. (Prior to the pandemic, the global film industry generated about $40 billion a year in ticket sales.) Now Hollywood has come calling, injecting the industry with cash while trying to lure game streamers off their native platforms and into lucrative deals with TV and film producers. But gamers don’t really need Hollywood to grow their brands. In fact, the opposite is true.

“Gamers like Valkyrae eclipse the social-media followings of what we would consider to be big actors, athletes, and musicians,” said Rod Breslau, a popular esports journalist and consultant who’s known by the name “Slasher” online. “The entertainment elite wants to get into gaming as much as gamers are trying to get into the mainstream.”

Your kids, grandkids, or younger siblings already understand this. But for everyone else, the sheer speed and scale at which video game live-streaming has taken over entertainment—and changed the very notion of what it means to be a celebrity—can be shocking. This is what you need to know to understand the genre of entertainment that will rival TV and film for many years to come.

Image for article titled How watching other people play video games took over the world

Table of contents

The appeal | The new celebrity | The platforms | The Hollywood push | The global streamscape | The next frontier

Image for article titled How watching other people play video games took over the world

The appeal of watching people play video games

Like sports, video games, first and foremost, are meant to be played. No game developer, streamer, or consumer will tell you otherwise. But the viewing experience is becoming equally important.

“We’re now thinking as much about what the viewing experience would be as the gameplay,” said David Tinson, the chief marketing officer of Electronic Arts, the video game giant responsible for both sports franchises like Madden and FIFA and also first-person shooters like Battlefield and Apex Legends. Today, all those games need to be as fun to watch as they are to play.

The foundation of watching a live-streamer play games—and what differentiates it from more traditional forms of visual entertainment—is its interactive element. It is a realtime hangout session with a celebrity. Viewers not only chat with other fans, but can also have an actual exchange with streamers, who monitor the chat and read out donation messages from eager fans, all while sharing intimate moments of their lives with thousands of their closest friends.

“I really love having a stream open in the background, because it’s comforting, as if there is a friend with me,” Valkyrae said. “It feels really good, feeling like you’re a part of something. Even just hearing somebody’s voice, if you spend a lot of time alone.”

For Gen Z, a cohort of young consumers roughly between the ages of eight and 25 who grew up on the internet, watching live-streams can be as natural as older generations turning on the TV or flipping on the radio. These digital gaming spaces are where many of them feel the most comfortable. A 2020 report from the research firm YPulse found nearly half of consumers between the ages of 13 and 39 have watched other people play video games online. Almost a third of Gen Z consumers watch content on Twitch specifically at least once a week.

“These creators provide kids a community that they can feel they belong to,” said Doron Nir, the CEO of StreamElements, a company that provides many popular streamers with on-screen graphics, overlays, and other features. “That is really powerful.”

But beyond the solidarity and interactivity, watching video gamers is appealing to viewers because of its lack of physical or temporal constraints. Netflix may have popularized on-demand binge-watching, but platforms like Twitch take it a step further. Viewers can drop in and out whenever they want, and there is always—always—something new to see, no matter where you live or what language you speak. It’s the perfect medium for a generation that is used to operating on no one’s schedule but its own. Watching streamers requires as much or as little investment as the user seeks.

“Historically there’s been this very stigmatized idea of Johnny in his mom’s basement, with no lights and no friends, playing games all day,” said Nick Allen, who runs operations at Loaded, a talent agency that represents top streamers like Shroud and CouRageJD. “But it’s very different than that. Kids are turning to gaming as their social experience.”

Image for article titled How watching other people play video games took over the world

The platforms

Right now, the streaming landscape consists of three major players: Amazon-owned Twitch, Google-owned YouTube Gaming, and Facebook Gaming.

Twitch dominates live-streaming

Twitch was first to the scene. It was spun off from the live-streaming website in 2011 when its founders realized the gaming vertical was growing much faster than every other type of livestream. Amazon bought the company in 2015 for $970 million—today, some analysts say it’s worth more than 15 times that.

The platform owns about 90% of hours produced and 64% of time watched across the gaming live-streaming market, according to a report last year from Streamlabs. The majority of the world’s most popular streamers, including Ninja, Pokimane, and AuronPlay, stream on Twitch. About 2.5 million people are watching Twitch at any given time (with peaks much higher than that), said Michael Aragon, the platform’s chief content officer.

Twitch’s head start, along with its big corporate backing and strong audience community, mean its dominance will be hard to break.

“Amazon likes the young eyeballs,” Pachter said. “They want Twitch members to get their own Prime accounts once they leave their house.” In 2016, Amazon rolled out “Twitch Prime,” which gives special features to users on Twitch who have linked their (or their parents’) Amazon Prime accounts.

Creators make most of their money on the platform through two ways: subscriptions and advertising. Depending on the streamer’s contract, they can keep up to 100% of their subscription revenue. (A basic subscription to a streamer’s channel, which gives users perks like the ability to participate in the chat and use of unique emoji, costs $5.) Streamers also get a 30% cut of the ad revenue. Ads periodically run during live-streams—not unlike TV commercials.

Twitch generated about $230 million in ad revenue in 2018, the Information reported last year. That figure is likely significantly higher now, but Amazon does not break out Twitch’s financials from the rest of its business.

YouTube dominates on-demand viewing

If Twitch has a stranglehold on live-streaming, then YouTube is the king of video on-demand (VOD) gaming—as it’s been for more than a decade. While YouTube Gaming only accounts for about 5.5% of live streaming hours produced, according to Streamlabs, its market share increases to almost 23% when you account for hours watched. And that doesn’t even include VOD. Virtually every major streamer, no matter where they do their live broadcasts, uploads videos to YouTube, where fans can catch the greatest hits from their streams without needing to tune into entire live broadcasts.

“They might stream on Facebook or Twitch or another platform, but they’re all still really big YouTube gaming creators,” said Ryan Wyatt, the 34-year-old head of YouTube Gaming. To his point: Tyler “Ninja” Blevins, widely regarded as one of the biggest names in streaming, has even more subscribers on YouTube than he does on Twitch. He live-streams on Twitch, but many of those broadcasts are then neatly packaged into YouTube videos by a team of professional editors. The platform is second only to Wikipedia in internet traffic, which has helped its live streaming section grow. Come for the cat videos, stay for the gaming streams.

Because of its parent platform’s omnipresence, Wyatt says YouTube Gaming’s competition isn’t just Twitch, but any platform that competes for consumers’ attention.

“I think of Netflix as a bigger competitor to YouTube Gaming, because it’s closer in size and scale,” Wyatt said, pointing out that the amount of time YouTube Gaming’s audience spends on the platform has doubled since 2018, from 50 billion to 100 billion hours watched per year. (Accounting for VOD, that’s significantly more than Twitch.) On Netflix’s last earnings call (pdf), Netflix CEO Reed Hastings also mentioned YouTube as a competitor, even before Disney or HBO.

YouTube is starting to make some inroads in the live-streaming arena as well, evidenced by it signing Valkyrae and other popular streamers to exclusive contracts. But it’s still far behind Twitch.

Facebook is…trying

Facebook is investing in gaming as well, but so far it’s been the least successful of the three. Its market share is hovering around 3%, according to Streamlabs. It’s had trouble both luring top streamers away from the other platforms and also growing its own. Part of that may be that the company has found itself embroiled in political controversies that streamers and their representatives may not want to be associated with. Facebook did not respond to a request for comment on this story.

But its biggest drawback might also be what the company thinks is its most unique proposition: that Facebook Gaming livestreams are tied to each creator’s individual Facebook account. The platform has been overwhelmed by streamers who broadcast themselves cheating at games like Call of Duty: Warzone—a practice that is against the rules on most streaming platforms. Facebook has increased efforts to demonetize streamers who broadcast themselves cheating at games, but it’s been slow to outright ban them, as Twitch has.

“The gaming team does not have the clout or authority within the company to ban the cheaters’ accounts, because they’re actual Facebook accounts,” Breslau said. “They’re not separate.”

On the other hand, that synergy with Facebook as a whole might be what keeps the platform afloat amidst its early struggles.

“It’s going to take a lot more time for them to get things going,” Breslau added. “They’re still a distant third. But they do have an infinite amount of money. Because it’s part of Facebook, it has a chance of long-term success.”

Microsoft gave up

Microsoft’s attempt at a Twitch competitor, Mixer, flopped stupendously. After buying it in 2016, Microsoft shut the platform down last year, saying it started too far behind the others to catch up. That’s despite briefly signing both Ninja and Shroud, a popular gamer whose brand is that he is preternaturally good at every game he plays. “It’s like watching LeBron play basketball,” said Twitch’s Aragon.

Shroud, along with Ninja, went back to Twitch after Mixer folded. Details of their Mixer contracts were not publicly disclosed, but they were both believed to be somewhere in the vicinity of $20 million over several years.

Mixer’s demise cemented Amazon, Google, and Facebook as the only three serious players at this stage. And it may stay that way for awhile.

“[Mixer’s] death may have scared off anyone who was thinking of starting a new platform,” Breslau said. “If Microsoft can’t make it work spending tens of millions of dollars signing the biggest streamers in the world, there’s really no hope for anybody else as an upstart.”

Image for article titled How watching other people play video games took over the world

The new celebrity

Valkyrae may have been stocking shelves at GameStop a few years ago, but today she is arguably as much of a global star as Brad Pitt or Serena Williams. And that’s for a reason: Not everyone can do what she does. Live-streaming flexes a variety of creative muscles: The best are able to be gamers, podcast hosts, and performers all at once, holding the audience’s attention all day, every day.

“Improv is a huge skillset I think even us streamers take for granted,” Valkyrae said. “The ability to sit in front of the computer and entertain people for six hours with no script is a skill that, over time, all streamers have developed. You have to mentally be ‘on’ the entire time.”

For the rest of us, getting through a five-minute presentation at work, or even enduring small talk without tripping over our words, can be a challenge. That streamers captivate viewers simply by sitting in a chair is no small feat. Not all can—of the nearly 10 million hopefuls who point cameras at their faces and stream on Twitch each month, only a small percentage are able to turn that into a career that pays the bills. And only a small percentage of those turn into mega-celebrities like Valkyrae or Ninja.

What separates these celebrities from the Chris Hemsworths or the Beyonces of the world is that, for the most part, they don’t seem so distant. They’re right there, accessible, willingly bringing people into their actual homes every day.

“They look like normal people,” Michael Pachter, an analyst for Wedbush Securities, said. “Every kid is like, ‘Oh shit, I can be the next Ninja.'”

And being “the next Ninja”—however unlikely—is a lot more attainable than being Michael Jordan. All anyone needs to get started streaming on Twitch or YouTube is a computer and a webcam. If you’re charismatic, you might just get a following.

“There’s something magical about the accessibility,” Allen said. “When I watch the NBA, it’s hard to see a slam dunk and then envision myself doing that same thing. But when I watch Call of Duty, and I see some crazy thing happen, the barrier for me to immediately jump over and try to do that myself is incredibly small.”

By the digits

3.5 million: Live viewers on Twitch, at the time of this writing, according to TwitchTracker

133,139: Live channels on Twitch,

3,021: Games being streamed on Twitch,

2 billion: Hours watched on Twitch in February 2020

22.2 million: Combined hours Twitch viewers have watched the streamer Félix “xQc” Lengyel in the last 30 days

$970 million: Amount Amazon paid to buy Twitch in 2014

$15 billion: Current market value of Twitch, according to some estimates

Image for article titled How watching other people play video games took over the world

The Hollywood push

The explosion of celebrity streamers has unsurprisingly attracted the attention of more mainstream entertainment industries. Many of the top streamers have signed with the Hollywood talent agencies United Talent Agency (UTA) and Creative Artists Agency (CAA). Ninja, who’s repped by CAA, appeared on the Fox reality singing show The Masked Singer (he was voted out in the first episode) and now has a cameo as himself alongside A-list actor Ryan Reynolds in the upcoming action comedy Free Guy. (Jessica Blevins, Ninja’s wife and manager and a streamer in her own right, signed with CAA this month.)

“We want them to become bigger stars,” Twitch’s Aragon says of the platform’s streamers. “Their success is our success. We always want them to remember Twitch is their first home, but, hey, knock yourself out if you get a Netflix special.”

Dr Disrespect is a fictional character created and performed by Guy Beahm who used to stream on Twitch and is now on YouTube. Beahm leveraged his wildly popular online persona into a TV development deal with the production company founded by The Walking Dead creator Robert Kirkman. A unique cross between WWE superstar and the villain in a Jean-Claude Van Damme movie (the “Doc,” as he’s generally known, frequently quotes the 1988 martial arts film Bloodsport), Dr Disrespect is now releasing an in-character memoir, due out on bookshelves March 30.

The 6’8” gaming superstar, who dons a jet black mullet, sunglasses, and a tactical vest whenever he streams inside his multi-million-dollar “arena” (in reality, a small studio in his home), probably represents the streaming industry’s best chance at having a true crossover celebrity who’s able to transcend the bounds of live streaming.

“There are a lot of different ways to do storytelling with production polish and interactivity that is not just someone literally playing the game from their bedroom,” said Peter Letz, the agent at CAA who represents both Dr Disrespect and Ninja. “Audiences want to see that pushed forward.” Dr Disrespect declined to be interviewed for this story.

So far, most streamers don’t have ambitions as bold as Dr Disrespect’s. That may be because they’re already huge without having to crossover into TV or film. Movie stars, on the other hand, see an opportunity in streaming.

Dozens of mainstream celebrities, including actor Terry Crews and rappers Snoop Dogg and Post Malone, have launched their own Twitch channels. Last year, New York congresswoman Alexandria Ocascio-Cortez got out the vote during a game of Among Us that became one of the most-watched Twitch streams ever. She joined top streamers like Pokimane, DrLupo, and HasanAbi, a progressive streamer who, rather than play video games, discusses politics and current events.

“Gamers don’t need to be on TV to show how cool or legitimate the industry is,” Breslau said. “It really is the flip side. Mainstream entertainment figures need to do streaming and play games to show that they are cool.”

Game live-streaming isn’t just popular in the US. Only about half of the viewers on Twitch are watching English-language streams, according to the website Twitch Tracker. Spanish and Portuguese together account for about 20% of all streams.

Outside the US, Spain has birthed a number of globally popular streamers, in part due to the prevalence of the Spanish language around the world. Six of the 10 most-viewed broadcasts of all time are from Spain. Ten of the top 15 are from outside the US. Last year, Spanish streamer TheGrefg amassed a peak of 2.4 million concurrent viewers during a Twitch stream in which he unveiled a custom Fortnite skin.

France, Brazil, Germany, Russia, and South Korea also have robust streaming communities. But one country still dwarfs them all, including the US.

“China blows the US out of the water,” Breslau said. “Their streaming platforms make Twitch seem insignificant.”

China has two major platforms—Huya and DouYu—and both of them are as big as Twitch. As of last year, DouYu had 165 million monthly active users, to Twitch’s 140 million. And now the two services want to merge to create a streaming behemoth with 300 million combined users. That’s drawn the scrutiny of Chinese regulators. If the deal goes through, Tencent, which already owns parts of both companies, would control two-thirds of the mega-platform.

Image for article titled How watching other people play video games took over the world

The next frontier

Much of the allure of video game streaming is that—unlike Hollywood, which often struggles to innovate—the industry is constantly finding new ways to engage with the audience.

“Streaming is still in its infancy, which is really exciting,” Hana Tjia, an agent at UTA who represents Valkyrae and Pokimane, said. Tjia pointed to the rise of virtual festivals, concerts, and art shows during the pandemic.

One of the latest trends is roleplaying—when streamers embody fictional personae inside the worlds of the games they’re playing. “NoPixel,” a designated role-playing world in the adventure game Grand Theft Auto V, has quickly become one of the top draws on Twitch and YouTube. Streamers like Summit1g will log on and interact with other players as characters, tweaking their voices and formulating backstories for the enjoyment of fans. Inside the world of GTA, though he’s still streaming normally, he acts as “Charles Johnson,” the getaway driver for one of the game’s many fictional gangs. Fans watch him inhabit the role in real time.

Last year, the screenwriter Gary Whitta debuted a talk show on Twitch held inside the world of Animal Crossing. Among his many guests was the legendary musician Sting. Other in-game hangouts have popped up sporadically in the last few years, including a designated server on the survival game Rust that attracted dozens of popular streamers—like a meeting of the Avengers.

The industry is innovative because there are always new voices entering the scene—and almost all growth is organic. It is unscripted, collaborative, interactive entertainment. It reflects the personality of the generation that made it mainstream. And its next act likely won’t be what anyone expects.

“There is somebody that’s streaming right now to just four or five people, who’s going to be the next Shroud,” Aragon said. “We don’t know who it is, but we know they’re out there.”