BUSINESS
How Live Streaming Video Games Became Big Business
How Twitch became a powerhouse in the world of live streaming.
BY THE EDITORIAL TEAM
JUNE 6, 2023
Image from Twitch
How Twitch became a powerhouse in the world of live streaming.
Image from Twitch
Watch other people stream when they play video games? Who would ever be interested in that? The proposition sounded absurd. But when a site called Justin.tv was launched in 2007, the concept seemed to resonate with an audience. Justin.tv allowed people to stream a wide variety of content leading to the gaming section growing fast.
As the gaming streams gained popularity, Justin.tv made the decision to move the gaming category to a new site called Twitch in 2011. It was the start of something that would eventually become a cultural phenomenon. The gaming section performed so well that the original Justin.tv site was shut down in 2014 because the parent company wanted to focus solely on Twitch.
For someone outside the gaming world, it can be hard to understand how large Twitch had become by 2014. By then, it was the fourth-largest source of Internet traffic during peak times in the United States, only behind Netflix, Google, and Apple.
The growth was fuelled, in part, by venture capital, and the company was on track to become profitable. But the next step would give the platform financial muscles to accelerate the growth even faster. On August 2014, Amazon bought Twitch Interactive for US$970 million in, as reported, an all-cash deal.
Twitch, originally a streaming platform where you could watch other people play video games, also started allowing the streaming of non-gaming content. An influx of people began streaming things like music, art, cooking, traveling, talk shows, and much more.
The concept of Twitch is appealing. Anyone can start an account and stream whatever they like, as long as it’s within the Terms of Service, and as long as it fits into the existing categories. What makes Twitch interesting is the ability to chat with the streamer. That makes the experience highly interactive.
If you watch a movie, it’s impossible to interact with the actors, but on Twitch, you can chat with your favorite streamer in real time. That makes it an excellent platform for building communities and a loyal fan base.
Image from Twitch (screenshot)
Streamers who build a large audience can become an affiliate or even get a partnership with Twitch. That allows the streamer to accept subscriptions and donations from fans. They can also run ads, making the stream a way to earn income.
Twitch has 31 million average daily visitors, and 8 million streamers go live each month. According to Twitch, nearly 75% of the viewers are between the ages of 16-34. Every year Twitch also hosts an event called Twitchcon, a convention open to industry professionals, streamers, and fans.