For Quartz members—Twitch: Amazon’s gaming empire

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Hi [%first_name | Quartz member%],

A man with green hair talks calmly about his breakfast, before kicking off a game of Call of Duty and (virtually) annihilating all who dare test his skills. While he plays, he reads out messages sent by fans in real time, simultaneously gaming and hosting what amounts to a stream-of-consciousness video podcast for tens of thousands of viewers. This is Twitch, the most successful company on Earth at getting people to watch other people play video games.

But first, a recap: Joe Biden’s lengthy to-do list includes reversing Trump’s climate legacy, and China welcomed the new US president with a Covid-19 conspiracy theory. Jack Ma would like you to know he has not disappeared, and a new immigration law could make it harder for Hong Kongers to flee. Netflix says it has solved its skeptics’ biggest complaint (shockingly, it’s not the lack of new Witcher episodes). Is it time to worry about inflation? Which companies are changing their political donation policies? Is the US ready for a $15 minimum wage? We looked into all of it.

Your most-read story this week: Biden and Harris’s inauguration clothes sent a powerful message. And most relatable member goes to the reader of How to stop hating the place where you live. That one hits different in 2021.

Okay, now grab some snacks and nestle into that gaming chair. We’re talking about Twitch.

Game, set, watch

While Netflix, Disney, and other media conglomerates were battling it out for streaming TV dominance, another type of streaming war was raging. And this one now has a decisive winner.

Twitch, the Amazon-owned platform that live-broadcasts gamers playing video games, is the undisputed champion of its arena. It hosts 91% of all video game streaming, dwarfing competitors from YouTube and Facebook. In less than a decade, Twitch has become one of the most popular platforms on the internet, serving more than 2 million viewers at any given time of any given day.

Average concurrent viewers on Twitch topped 2 million in 2020, compared with 1.25 million a year earlier.

Much like Netflix, it has reached new heights during the pandemic, becoming a go-to entertainment destination for consumers confined to their homes around the world. There are now 7 million streamers who broadcast themselves playing video games each month—nearly twice as many as there were before the pandemic began. (Amazon does not publish Twitch revenue.)

Video game streaming borrows from reality TV, film, and podcasting, but it’s a medium unto itself: interactive, unscripted, and chaotic. It places big personalities directly in front of their fans, creating a relationship between celebrity and consumer that is unrivaled across Hollywood. For many in Generation Z, Twitch is the new movie theater, except their idols aren’t Leonardo DiCaprio or Brad Pitt, but rather teens and 20-somethings in their homes snacking on Doritos while they live-stream themselves playing Call of Duty or Fortnite.

As streaming becomes even more popular, Twitch (and Amazon) will have to fend off a barrage of new competition, much in the same way Netflix has for TV. But for now it operates a near monopoly of a growing subset of entertainment, and it’s a name you’re going to hear way more often.

By the digits

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

136,561: Live channels on Twitch, at the time of this writing

2,865: Games being streamed on Twitch, at the time of this writing

1.9 billion: Hours watched on Twitch in December 2020

26.7 million: Hours Twitch viewers have watched the streamer Félix “xQc” Lengyel in the last 30 days

16.6 million: Twitch users following the channel of Tyler “Ninja” Blevins, the most followed user on the platform (seen below on The Tonight Show)

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

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

Brief history

2011: Live broadcasting platform spins off its gaming channel—the site’s most popular section—as “TwitchTV.” It then launches a partner program, which allows broadcasters to share in advertising revenue.

2012: TwitchTV raises $15 million in venture capital. It signs a deal that gives CBS Interactive the rights to sell its advertising and sponsorships.

2013: The company raises another $20 million and hires its 100th employee. It becomes profitable. About 45 million viewers watch Twitch monthly. It expands into non-gaming content, including streamed music performances. Twitch no longer needs CBS and creates an in-house ad sales team.

2014: shuts down, and its parent company rebrands as Twitch Interactive, to focus solely on Twitch. Google backs out of a deal to buy Twitch Interactive for $1 billion over antitrust concerns. A few months later, Amazon buys Twitch for $970 million.

2015: Twitch has over 100 million monthly viewers and more than 11,000 official streaming partners. The first annual TwitchCon—during which fans can meet some of their favorite streamers in person—is held in San Francisco.

2016: The platform introduces an in-house currency called “bits” for users to spend on microtranscations. It also launches Twitch Prime, a service that offers exclusive features for viewers who link their Amazon Prime accounts.

2017: Twitch expands further into non-gaming content, adding an “IRL” (in real life) channel for streamers to broadcast their day-to-day lives, and partnering with US pro sports leagues to stream games to Prime members.

2018: Twitch has over 27,000 partner streamers. Its website and app are blocked in China.

2019: Twitch starts signing popular streamers to multiyear exclusivity contracts to prevent them from leaving for one of its many new competitors.

2020: Twitch Prime is renamed Prime Gaming. Microsoft’s Twitch competitor, Mixer, shuts down. Twitch has 27 million daily visitors and 6 million creators streaming each month. It’s valued at $15 billion, according to some estimates.

We’re all gamers now

The pandemic has not been kind to many companies—but Twitch is one of them. Virtually all of its viewership and engagement metrics skyrocketed last year, thanks to quarantined consumers looking for stuff to do. While many professional sports were off the air in the first half of 2020, Twitch was still there, stronger than ever.

Monthly hours watched on Twitch are approaching 2 billion, up from less than 1 billion a year ago.

Twitch’s rise has coincided—and perhaps boosted—a more general surge in video game use around the world. US gaming sales in August increased 37% from the same month in 2019, game developers reported record profits in 2020, and mobile game sales rose by as much as 50% in some countries. Popular games have grown even more popular, while obscure games have become phenomena almost overnight.

Twitch is the central hub for all that activity—a one-stop shop to learn about new games, stay up to date on your favorite streamers and the industry’s latest developments, and engage in a global community. About two-thirds of Twitch viewers live in a country other than the US. Nearly half of the channels on Twitch are broadcast by a streamer speaking in a language other than English.

Twitch for Dummies: a streaming glossary

Bits: in-site virtual currency viewers use to buy special emotes to support their favorite streamers

Dono: a donation or tip of real money from a viewer to a streamer

Emotes: custom Twitch emoticons viewers frequently send to the chat box while streamers are live—often its own language

Gifted sub: when one viewer buys a subscription to a streamer’s channel for another viewer

Mod: a moderator the streamer appoints to police the chat

Ninja: the most-followed streamer on Twitch, known for playing Fortnite and, more recently, Valorant

Pokimane: one of the most popular streamers on Twitch and a member of the social collective OfflineTV, along with several other streamers

Raid: when a streamer directs their audience, en masse, to watch a another channel

Shroud: the third most-followed streamer on Twitch, known for his skill at several first-person shooter games

Streamer: a person who live broadcasts themselves playing video games

Stream sniping: when a viewer exploits information learned from watching a streamer and then enters into the same online match as a streamer to kill or otherwise disrupt their gameplay

Tfue: the second most-followed streamer on Twitch, known for playing Fortnite and Call of Duty, and for feuding with Ninja

Keep reading

Thanks for reading! And don’t hesitate to reach out with comments, questions, or companies you want to know more about.

Best wishes for a must-watch end to your week,

Adam Epstein
Entertainment reporter