Amazon’s $1 Billion Twitch Gamble
In 2014, Amazon made a bold move by acquiring Twitch for nearly $1 billion. Fast forward a decade, and the livestreaming platform still hasn’t turned a profit. Despite explosive popularity and millions of daily visitors, Twitch remains unprofitable, as highlighted by a recent Wall Street Journal article.
Declining User Spending and Engagement
Documents reviewed by the Wall Street Journal reveal that Twitch’s biggest spenders are tightening their wallets. Coupled with a slowdown in new user growth and engagement, the platform’s financial outlook appears bleak.
A recent Q2 report from Stream Hatchet shows:
- Twitch’s market share of hours watched dropped from 70% in Q2 2023 to 60% in Q2 2024.
- YouTube’s share grew from 17% to 23%.
- Kick now holds 5.5% of the market share.
The shift indicates that Twitch is losing ground to its competitors.
Amazon’s Long-Term View
Despite these challenges, Amazon maintains a long-term perspective on Twitch. A spokeswoman emphasized Twitch’s ability to attract hard-to-reach audiences and expressed confidence in its potential. However, the platform’s business model remains challenging, with high costs associated with enabling tens of thousands of simultaneous livestreams to be viewed around the world.
Small Streamers Gain Viewership
The Stream Hatchet report further highlights that the top 5% of streamers by hours watched now account for 86% of the total market share, down from 98% in Q2 2019. This indicates a more diverse market for smaller streamers.
Twitch’s Response and Future Plans
Twitch is not sitting idle. The platform is seeing success beyond video games with its Just Chatting category, where creators discuss various topics with viewers. Additionally, Twitch’s sports, travel, and music sections are growing.
The company is also working on improving its mobile experience to drive shorter and more frequent user sessions. A new app redesign featuring a discovery feed filled with short snippets from creator livestreams has just been released.
Esports and Event Highlights
Despite its financial woes, Twitch remains a key player in esports. The Stream Hatchet report notes that the League of Legends 2024 Mid-Season Invitational was the most-watched event of Q2, boasting almost 70 million hours watched.
Twitch Trends and Stats
As a reminder, you can see a month-by-month breakdown of all kinds of statistics for Twitch, including average viewers, streamers, languages, hours watched, and much more on our dedicated Twitch stats page.
🔥 Pete’s Content Corner
Delve into my weekly selection of content creation highlights—handpicked videos, podcasts, and tweets that promise to captivate, educate, and entertain.
- Twitch launched the Creator Clubs Program, which is geared toward helping streamers find communities around their shared interests.
- Twitch released the schedule for TwitchCon San Diego 2024.
- Discord wrote about all of its July updates, including improvements to Group DMs and various optimizations to its mobile apps.
