Twitch TV: How we found a way to make money playing video games | Technology | DW | 26.08.2015
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Technology

Twitch TV: How we found a way to make money playing video games

Twitch, the Internet's largest streaming video service, has made it possible for gamers to make a living off their hobby. The platform has turned into a juggernaut big enough to challenge the likes of YouTube.

Imagine a football field. Now imagine that field is big enough such that every single person in the world who loves football can either play it or watch it from the sidelines. There's always a game happening somewhere, at some time, on this field.

Further, everyone around and on this field is constantly, incessantly, talking to each other about the game: players with other players, spectators with other spectators, and most importantly, the spectators with the players. Everyone can, and does, communicate.

The good players, who interact well with the spectators and are entertaining to watch, naturally begin gathering larger and larger followings and cultivate a real community. The best players attract such huge followings that they start to garner attention from managers and brands. They are offered endorsement and merchandizing deals, which allows them to monetize their game-playing.

Now imagine that instead of football, everyone in this scenario is playing video games. And instead of a huge, global football field, it's a website, with millions of people streaming themselves playing video games every day, some of them even getting paid to do so, and millions more avid gamers watching them.

Welcome to Twitch, one of the most powerful online social media and gaming platforms around today. If you like to cook, you watch the Food Network. If you like football, you watch ESPN. And if you like video games, you watch - and perhaps also play - on Twitch.

The First Broadcasts

Most parents would incessantly tell their children to put down the controller, turn off the computer or TV, and go outside already.

But that generation that stared at a screen for too long grew up. In 2007, Justin Kan, an entrepreneur just two years out of Yale University, decided to strap a camera to his head and film his life 24/7. He called it Justin.TV, and coined the phrase "life casting." News outlets covered Kan. Hundreds of people tuned in to his stream.

And then the novelty of watching a stranger live their life wore off, and Kan and his co-founders opened the channel to everyone. People began broadcasting sporting events, concerts, weddings, everything, including streams of themselves playing video games.

Eventually, more and more people just began streaming video games, and the video games channel on Justin TV quickly became the most popular.

"This dates back to the days of arcade games, where you'd have one person playing Donkey Kong or Ms. Pacman, and 15 people standing around watching them," said Chase, Twitch's director of public relations, who does not give out his last name professionally. "Or when home consoles first launched, when there were only two controllers, so half of your family would sit watching you play your Atari."

Strategy game "League of Legends" is by far the most popular game to watch on Twitch.

One of the founders of Justin.TV, Emmett Shear, decided that the video gaming portion of Justin.TV was growing so quickly it should be spun into its own site with its own brand. In 2011, Twitch launched with 3.2 million viewers a month. In 2013 that number had increased to 45 million. In August 2014, Amazon.com acquired Twitch for a cool 970 million dollars.

Today Twitch sees over 100 million viewers every month, who are watching 1.5 million broadcasters, also called "casters" or "streamers." Chase attributes this to people simply seeking entertainment "People enjoy watching others who are the best in what they do at a shared interest," he said.

The Platform

Twitch still has a ways to go if it wants to catch up with social networking giants Instagram (300 million monthly users), Twitter (316 million) and Facebook (1.49 billion).

But that's nothing to sniff at. The average Twitch user spends 106 minutes per person per day watching someone play video games. By comparison, in the US, the average Internet user spends 42.1 minutes on Facebook, 21.2 minutes on Instagram, and 17.1 minutes on Twitter.

"This is social video for gamers," Chase said. "And what that means is that you're not just watching someone play, it's highly interactive. The broadcaster is talking to the audience, the audience is responding through chat to the broadcasters, and also chatting with each other."

Most interaction takes place through Twitch's universal chat feature. Audience interaction is a crucial part of many broadcasters' marketing strategies, including Rocket Beans TV, one of the most popular German-language channels on Twitch.

Unlike a lot of other broadcasters, who may or may not set schedules for when they're on and offline, Rocket Beans TV is a 24-hour, seven-days-a-week TV show.

Rocket Beans hosts cover the Gamescom in Cologne

The chat features enables Rocket Beans TV to interact with their viewers in real time, and even take suggestions for what kind of shows their viewers want to see. "Our community has their own space, so they can send us their ideas and we then stream it," said Charlotte Favereau, the marketing manager for Rocket Beans TV. "They can create shows with us."

The Industry

Twitch has become such a huge movement in the video gaming community that all major developers now have their own channels. "They just go straight to the community now" when a new product is released, Chase said. Why? Because Twitch streamers now influence the market far more than a traditional advertiser could.

The idea of streaming videos for profit has become so powerful that Google announced on Wednesday that it would be launching YouTube Gaming, a games streaming service meant to compete with Twitch.

Popular streamer PewDiePie from Sweden reviews the recent horror video game, "Alien: Isolation." This video contains graphic language.

"These days, if you want to buy a game, you go to Twitch, you watch an hour of actual gameplay, and you talk to the broadcaster about whether you should buy it, should you rent it, should you pass," Chase said. This means that many companies and developers sometimes choose to exclusively launch products on Twitch.

The community that forms around the most popular broadcasters who influence these purchasing decisions is so strong that people are willing to look at and click on ads that are hosted on these broadcaster's pages so that the boradcasters can make some money.

For example, Twitch released a product called Turbo in February 2013, which would allow viewers to eliminate ads from their account for a small fee every month.

"A small but vocal minority said, 'Wait, does this mean our broadcasters won't get paid?' and they were slightly outraged," Chase said. "We thought people would be celebrating having an ad-free product, but that's not how they view it. It's really special that we have this audience who really understands that they can directly benefit our broadcasters."

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