How Does “Twitch,” Amazon’s Video Game Streaming Platform, Make Money?

Twitch may just be Amazon's best-kept secret. Acquired in a 2014 bidding war with Google for $1 billion in cash, the gaming platform and social network continues to break its own high scores. Less than four years after that acquisition and just seven after its initial launch, Twitch boasts a valuation of about $3.79 billion.

In 2014, Twitch accounted for 40% of the live streaming traffic in the United States and 1.8% of all internet traffic, second only to Google, Netflix and Apple. In 2017, it surpassed legacy network ESPN in audience size and live streamed more content than ESPN, WWE, and MLB — combined. By 2020, the number of esports viewers worldwide will grow from 380 million to 589 million, according to research firm Newzoo.

Today, an average of 15 million viewers tune into Twitch each day to watch, host, and cheer on live streams.

What has enabled the streaming site to capture and grow its audience despite rising competition comes down to a simple sentiment, encapsulated in a report from research firm SuperData: "While the 'Why would anyone want to watch someone else play video games?' sentiment continues to exist among those behind the curve, the smartest publishers, advertisers, and brands are recognizing that their consumers are now watching videos of people playing games."

Largely ignored by advertisers and mainstream media networks prior to 2014, online gamers, spectators, and entertainers have long-awaited a platform for hosting and streaming content. Launched in August 2015, Google's "Youtube Gaming" has since delivered on that need, but Twitch was first to the punch.

What Is Twitch?

Chances are if you were born after 1996, you may already be regularly using Twitch. (That's because, according to a recent study by Lifecourse Associates, over 70% of millennials have played or watched a video game in the last 60 days, compared to 60% of Generation X and 40% of Baby Boomers.)

For the baby boomers and late-blooming millennials in the room, Twitch is a platform that allows gamers to be broadcasters, viewers, and participants in online gaming communities. Users can live stream their gameplay, watch esports tournaments remotely, and cheer on their favorite competitive players.

More than just a website for watching and hosting live streams, Twitch is a social community of gamers. To some extent, this is a result of the platform itself. Unlike in professional sports, spectators on Twitch can connect directly with their favorite streamers, competitive players, and one another by commenting in real time on Twitch Chat. In the course of a stream, viewers might chat with one another, ask instructional questions, and engage with streamers directly.

As of 2015, the average viewer on Twitch watched a stream together with over half a million people and spent over 420 minutes on the site each month (in comparison to YouTube's average 291 minutes).

How Does Twitch Make Money?

Not unlike Google's Youtube, Twitch is a free streaming service fueled primarily by subscriptions and advertisements. However, backed by parent company Amazon, Twitch has experimented with and expanded its business model since 2014, defying precedent and forcing competitors to respond.

Advertisements

Common among video and streaming websites, Twitch integrates advertisements into its streams and on the sidebars of its website, which range in price from $2-10 cost per impression (basically cost per view). While Twitch has not disclosed the portion of its revenue generated from advertising, Newzoo predicts the video game streaming market will grow by 38 percent to $906 million this year and $1.65 billion by 2021, with sponsorships, advertising, and media rights generating most of that revenue. 

"As a consumer phenomenon, esports continues to grow its huge base of passionate fans across the globe," said Peter Warman, CEO of Newzoo. "As a business, esports is now entering a new and critical phase towards maturity. Big investments have been made, new league structures have been launched, sponsorship budgets have moved from experimental to continuous, and international media rights trade is starting to heat up."

The League of Legends World Championship was the most watched event on Twitch in 2017 with 33 million global viewers, about a fourth the viewership of that year's Super Bowl. With over $5.5 million in ticket sales, Warman predicts that the event may see competition for streaming rights in future years.

Growth in streaming advertising can also be attributed to the specific demographic that Twitch caters to. Twitch is dominated by millennials (born between 1982 and 2004), according to LifeCourse, with 49% of Twitch traffic coming from 18- to 34-year olds. That means that Twitch is more successful at delivering on this demographic than Facebook, YouTube, or ESPN and on par with Reddit.

While esports players remain overwhelmingly male, Twitch's viewership is more representative than many advertisers likely believe. "Compared to the days of the stereotyped gamer, the current viewer base has a high female representation (46%) and high average income ($58K in the US)," SuperData reports.

Subscriptions

If Twitch is Amazon's best-kept secret, second place goes to "Twitch Prime." While this membership normally runs at $4.99/month, Twitch's parent company integrated this membership with their retail website in September of 2016, so that Amazon Prime members can subscribe to Twitch Prime for free.

While the benefits of Twitch Prime are almost entirely aesthetic — adding additional color palettes and emoticons to chat — subscribers also gain the ability to gift half of their monthly subscription cost to one of the website's streamers. Subscribers can do this once every 30 days, leaving Twitch with just under $2.50/month per subscriber. Although Twitch has not released exact subscriber counts, the ten most popular streamers alone have a combined 160,000 Twitch Prime subscribers, worth about $400,000 to the company.

"Twitch Turbo" is the second of the streaming website's subscription services. The $8.99/month membership makes the game viewing experience smoother by cutting down advertisements, increasing video storage, and offering exclusive chat emoticons and colors.

In-App Purchases, Called "Bits"

In addition to cheering streamers on from Twitch Chat, spectators can also give live shout-outs to their favorite streamers using an in-app currency called "Bits." Viewers can buy Bits starting at $1.40 for 100, making the exchange rate about 1.4 cents to 1 Bit. "Cheering Bits" on Twitch amounts to animated chat emotes. Typing "Cheer1" into Twitch Chat will produce an animated grey triangle and cost you 1.4 cents. "Cheer100" creates a dancing purple diamond worth $1.40. Users can cheer any amount they want up to "Cheer10000" ($140 USD), and the corresponding emotes get larger and more colorful.

"If channel subscriptions are the equivalent to holding season tickets for your favorite sports team," said Twitch CEO Emmett Shear, "Cheering is like getting a crowd wave started during the game."

One cent of each bit is donated to the streamer, leaving Twitch with roughly 70%. Even at a net gain of .4 cents per Bit, Twitch has raked in nearly $1 million from Bit Cheering alone. Since launching in late June 2016, users have sent more than $1 billion Bits, totaling between $12.3 million and $14 million.

Leveraging Support from Amazon

Twitch announced in April that viewers would be able to watch 11 National Football League games during the 2018 and 2019 seasons, thanks to Amazon's renewed streaming deal for Thursday-night games with the NFL. While the broadcast of NFL football on Twitch is a byproduct of Amazon's ownership, the availability of professional broadcasts is a big win for Twitch — in part because Twitch viewers do not need to be paid subscribers to watch the games.

In August, Twitch teamed up with the privately-traded Pokémon Company to allow viewers to binge-watch streams of Pokémon: The Series and related movies on its website. In the past, Twitch has streamed Saturday Night Live, Knight Rider, and Mister Rogers, suggesting the company may look to expand into older televised content or extend its prime video exclusive content to the live streaming platform.

Live Stream Market Competition

In 2018, more people watch streamed gaming content than HBO, Netflix, Hulu, and ESPN combined. While Twitch is by far the most popular live streaming website for gaming and esports, Amazon's most notable competition comes from tech giant Google. Youtube Gaming is a Google project and a more direct response to Twitch. Launched in August 2015, after Google failed to acquire Twitch in a bidding war with Amazon, the video game streaming arm of Youtube curates and recommends live video for users.

For now, Amazon remains the leader in live-streamed video game content, but an independent report released earlier this year found that YouTube Gaming had grown its streamer base by 343 percent in 2017. Over that same time period, Twitch grew 197 percent.

Amazon’s Twitch launches Squad Stream feature to let up to 4 streamers play together

(GeekWire File Photo)

Up to four game streamers on Twitch can now broadcast their points of view within the same window thanks to a new feature from the Amazon-owned streaming leader.

First announced at TwitchCon last year, the highly sought-after feature among the Twitch audience known as Squad Stream is available now to the site's Partners. The feature is a good way for audiences to see multiple angles of a battle royale game like Fortnite or follow along as streamers team up in cooperative games.

The feature is similar to one that Microsoft's game streaming service Mixer launched in 2017. Co-streaming, as Mixer calls it, was part of a series of updates that came when the service formally known as Beam was rebranded after Microsoft acquired it.

Amazon bought Twitch in 2014 for $970 million. It is the dominant outlet for game streaming — the growing entertainment form where audiences watch gamers play their favorite titles — with 15 million daily visitors and 2.2 million broadcasters on its platform, according to Twitch's website. 

Douyu files for US IPO: How China's answer to Twitch is really not like the US game-streaming service at all

[unable to retrieve full-text content]While Douyu has often been dubbed "China's Twitch", a closer examination reveals the Wuhan-based company's business model is actually quite different to the Amazon-owned game streaming service. For ...

How to watch the Borderlands 3 gameplay reveal stream starting at 10 am PDT / 6 pm BST

The Borderlands 3 gameplay reveal stream begins today, and you can watch the whole thing right here. Gearbox has been teasing the hands-on gameplay since it gave Borderlands 3 its big debut at PAX East (which was also full of magic tricks and technical difficulties), having shown off the game first via stylish pans through an intricate CGI sculpture, then through a cinematic trailer that properly introduced our new set of Vault Hunters. Now you'll be able to see what the game itself looks like in action.

The stream is set to start today at 10 am PDT / 1 pm EDT / 6 pm BST. Once it begins, you can catch the whole thing in the above embed of the official Gearbox Twitch channel. Gearbox has teased that it will invite several Twitch streamers to broadcast their gameplay during the reveal event, and the Borderlands 3 Twitch extension will even give you the chance to earn some of the loot they find once the full game arrives in September (always nice to have a nest egg waiting for you).

What specifically will we see in the Borderlands 3 gameplay reveal? Gearbox is keeping some surprises in store, but there's a very good chance that we'll get a look at how the game fares in single-player as well as co-op, not to mention some insight into the skill trees for each of the four characters. Whatever you need to spec into to make Moze the Gunner ride in her mech at all times, I'm all for it.

While you wait, why not adorn your screen of choice with some Borderlands 3 character image wallpapers? Or check out this video guide to the hidden codes we spotted in the game's first trailers.

If You Want To Stream Video Games For A Living, Start-Up Pipeline Says It Can Show You How

When I tell people I play video games for a living, that is immediately followed by the same question every time: "Oh are you on Twitch?" While I have to explain that I'm a journalist and not the next Ninja or Dr.Lupo, more and more kids, teens and young adults are growing up wanting to emulate their streaming idols, some of whom are either doing so as a full time job, or on the higher end, making millions of dollars.

The path to get there is…rocky. Getting started in streaming now with such a flooded market is difficult, as you have to stand out and learn all the things not to do first in order to avoid wasting time. And now, one company wants to show you the way.

Pipeline was brought to my attention by Stephen Ellis, also known as Snoopeh, a former League of Legends pro who most recently worked at Facebook gaming. I've been following Ellis a long time, and Pipeline, co-founded with YouTuber David Steinberg (StoneMoutain64 with 1.9 million subscribers) is an interesting concept, at the very least.

Pipeline founders StoneMountain64 and Snoopeh

Pipeline

The idea is to form a community of up and coming streamers to try to set them on a path to turn streaming from a hobby to an actual career the way a select few content creators have been able to these past few years.

I think there is a hole in the market here to be filled. Pipeline lays out a number of issues that streamers trying to go full-time have to deal with, and I think a lot of people can agree that these ring true:

You're not supported by friends or family because they just don't understand.

You need to upgrade your setup but you don't have the money to invest in a new stream setup.

You love streaming but are struggling to get the viewers to see your content.

You don't have enough time to learn how to stream, as well as actually do it.

You're not sure where to start or what to prioritize for your stream.

It's hard to stay motivated when you're not growing.

Right now it is possible to simply Google "how to stream for a living" and you'll have a lot of streamers and YouTubers writing articles or filming videos about the topic, about how they specifically found success, but Pipeline looks to be a dedicated program just for that, something I haven't seen elsewhere in the market. But it will cost you.

Pipeline operates as either a monthly membership ($29 a month) or yearly ($295). That gets you access to the Snoopeh/StoneMountain "playbook" of how to succeed in streaming, plus monthly live membership sessions, access to the private community of Pipeline streamers for cross-stream support and advice, and also discounts with some partnered hardware companies to bolster your stream set-up. The yearly pass gets you 1:1 sessions with Snoopeh and StoneMountain themselves.

It's…a steep price if I'm being entirely honest. I mean, not if the advice received does in fact get you to stream full time and change your life, but $30 a month for streamer who may already be struggling to make ends meet isn't nothing. My goal is to audit this system down the road to fully get a sense for what it contains, but it will likely be a big ask for a lot of people. And yet I don't think anything else like this exists in the market, and the two guys running it are respected industry figures that I genuinely believe want to give good advice and make this work. I mean, the business can't function if people don't end up seeing results from it, so it's in everyone's best interest for there to be growth here.

I cannot say whether I definitely recommend you, aspiring streamer, sign up for this, but I do think it's an interesting concept and released at a good time in the market when it can seem really hard to break through with so many people trying to get into streaming and content creation.

I'll be keeping an eye on Pipeline to see if it can create success stories or not. For now, I'm intrigued. Read more about it here.

Follow me on Twitter, Facebook and Instagram. Read my new sci-fi thriller novel Herokiller, available now in print and online. I also wrote The Earthborn Trilogy.

‘Mortal Kombat 11’ Kombat Kast: Start Time and How to Watch Final Stream Before Launch

NetherRealm/YouTube

It's the final Kombat Kast before the release of Mortal Kombat 11 and the NetherRealm Studios crew are likely saving some juicy details for last.

It's been over a week since the last MK11 stream, which featured character breakdowns of Kitana, Cetrion and D'Vorah. There's a lot the NetherRealm team can talk about but what will they choose to focus on? With only hours before the release of the next chapter in the Mortal Kombat story, here's everything you need to know to watch the next Kombat Kast.

WHAT TIME DOES THE MORTAL KOMBAT 11 KAST BEGIN?

The next Mortal Kombat 11 Kombat Kast begins Monday, April 22 at 4 p.m. EDT.

HOW TO WATCH MORTAL KOMBAT 11 STREAM ONLINE

The official Mortal Kombat YouTube page will be streaming the latest Kombat Kast. It'll also be the best place to watch it when it ends on VOD. YouTube can be watched on your PC, your mobile device and gaming console - including the Nintendo Switch.

We prefer watching the Kombat Kast on the official NetherRealm Twitch channel. You can watch it on your mobile device, desktop, PS4 or Xbox One. You can also watch the stream below.

Watch live video from NetherRealm on www.twitch.tv

WHAT TO EXPECT FROM THE MORTAL KOMBAT 11 KAST

NetherRealm Studios head honcho Ed Boon confirmed that the base roster for Mortal Kombat 11 stands at  25 playable characters. Twenty-three of them have been given the Kombat Kast treatment already.

Number 24 is the pre-order bonus fighter, Shao Kahn, who received his first reveal/gameplay trailer last week. Expect a complete breakdown of his specials, combo capabilities and maybe even his second fatality this week.

As for the final character on the MK11 roster, NetherRealm may reveal them during the stream. For spoiler's sake we'll let them do the honors. There's also the possibility that the team goes through some of the game modes that have yet to be touched upon like The Krypt.

Mortal Kombat 11 is set to release April 23 on PS4, Xbox One, PC and Nintendo Switch.

Are you excited for the launch of MK11 ? What do you expect to happen on this week's Kombat Kast? Let us know in the comments section below.

How to stream Windows Mixed Reality on Twitch and Mixer

Streaming what's going on inside an HMD is automatically more complex than streaming yourself playing a PC or console game. Not least because you can't monitor your stream and its settings while you're inside a virtual world.

Windows Mixed Reality is exactly the same. For the most part, right now, you're in a VR experience, that means total immersion and no eyes on the outside world. But Microsoft has actually made it pretty easy to stream your activities, to its own Mixer at least.

Here we'll show you how to do that, as well as how to get going on Twitch if that's your streaming platform of choice.

One thing of note before we get started: You currently cannot connect a Windows Mixed Reality headset to a capture card, such as those from Elgato, it seems. The Mixed Reality Portal doesn't see the headset, so you can't capture and stream this way.

How to stream to Mixer from Windows 10

We'll start with the easiest since Mixer streaming is built into Windows 10. If you haven't yet used Mixer, all you need is your Microsoft Account to login and get going. This also means that you can seamlessly begin streaming right from Windows 10 in just a couple of clicks.

The first thing you need to do is bring up the Game Bar while you're inside the Mixed Reality Portal app. You do this by pressing Win + G together, and when prompted tell it to remember this as a game. The Game Bar can be used in any app in Windows 10 really, but you still have to tell it that it's a game. Even if it's a web browser.

Here's how to get streaming:

Open the Mixed Reality Portal app.

Go fullscreen. This is important otherwise Windows will also broadcast the menu bar at the side of the Portal app.

Press Win + G to bring up the Game Bar.

Click the broadcast button.

Make sure the broadcasting window box is set to game.

Position your webcam where you want it or disable it altogether.

Turn on or off your microphone depending on whether you want to talk.

Click start broadcast.

There aren't many settings to change so in some regard you're at the behest of your PC as to how good your stream looks. We've tried it out a few times on a Windows Mixed Reality Ultra PC with a 20Mbps upload connection and things look pretty good. Mileage will vary depending on your own PC and connection speed, but this is one of the more system efficient ways to stream.

There are some settings you can alter. You'll find them in Settings > Gaming > Broadcasting. It's here where you'll find important audio settings regarding game and microphone levels. You'll need to play around with these to make sure that your game audio isn't drowning out your voice, but that you can still hear it properly if you wish.

More: Complete guide to streaming to Mixer from Windows 10

How to stream to Twitch and Mixer with OBS Studio

While you can use your webcam with your streams from Windows 10's built-in feature if you want a more professional looking, controlled stream you'll be using an external program. In this case, OBS Studio is currently your best shot. And it's completely free.

Download OBS Studio for Windows

There's a lot you can do to your streams with a tool like OBS Studio, including adding overlays, your webcam, custom alerts and widgets. Lots. For the purposes of this guide we're only showing you how to get your Mixed Reality footage and how to share that with the world.

Open the Mixed Reality Portal app on your PC. Do not minimize it at all.

Open OBS Studio.

Select the + button under sources.

Select game capture.

Change mode to capture specific window.

In the window drop down box, select [MixedRealityPortal.exe]: Mixed Reality Portal.

Click OK.

Now, OBS will pull the direct feed from the Mixed Reality Portal app so long as it's open and not minimized. This is much more efficient than capturing using a screen region record to achieve the same effect.

To actually stream you need to link OBS to your Twitch or Mixer account. This is pretty easy to setup:

Click settings.

Select stream in the sidebar.

Under service select your desired streaming platform.

Enter your unique stream key. You'll find this within your account settings on Twitch or Mixer. Don't share it with anyone else.

Click apply.

When you're ready to go click the start streaming button on the main OBS Studio dashboard.

OBS isn't just useful for streaming to Twitch or Mixer, but we've singled out those two services for the purposes of this guide. The important part is that OBS Studio can handle the direct feed from the Mixed Reality Portal, so in theory, you can stream to any service the program supports.

Note we also tried using the other popular broadcast tool, XSplit, with mixed results. We've not included it here because to stream using it requires a window capture right now. This isn't ideal nor is it very efficient on your system. XSplit supports DX12 capture so hopefully, it'll be a quick fix on their part.

And that's all there is to it. That covers the basics on getting your Mixed Reality content to the web, how creative you get is up to you!

All about Windows Mixed Reality

If your interest is piqued by Windows Mixed Reality, be sure to check out all the other great content we've got to help you find out everything you need to know!

See the Windows Mixed Reality Ultimate Guide!