eSports Wars: The Empire (Twitch) Strikes Back - Part 2

ESPORTS WARS: TWITCH STRIKES BACK - PART 2

eSports Wars: The Empire (Twitch) Strikes Back - Part 2 Photo (Lucasfilm)

TNL Take: In Part 1, I looked at the war that Twitch was facing between YouTube, Facebook, Twitter and a host of other players and startups.

Now let's look at how Twitch is fighting back.

Also for the record, "The Empire Strikes Back", is still the best in the entire Star Wars series. Don't @ me.

Twitch has long ruled the gaming live-streaming and eSports space. Although companies like Azubu, Hitbox and MLG (Disclosure: I used to work there) tried to take on Twitch, none of them got close to Twitch’s scale.

With further irony, Azubu acquired Hitbox in January... and then promptly ran out of money.

Amazon bought Twitch for ~$1B back in 2014 and looked like they were going to cement their stranglehold on live-streamed gaming content. However, starting with Activision-Blizzard’s bargain basement acquisition of MLG, things started to ramp up in 2016 with a full court press in 2017.

As I first mentioned in "The eSports Media Evolution" in The Next Level 061 last year, we are starting to see the bifurcation of eSports content across multiple platforms.

eSports Media Evolution (Photo: The Next Level)

For example, here’s what and where you’re going to need to go for Exclusive eSports content now:

  • ESL Counter-Strike Pro League (English) = YouTube
  • Heroes of the Dorm = Facebook
  • ESL TBD Tournaments = Yahoo eSports
  • Rocket League Championship Series = Twitch
  • ESL Weekly eSports Show = Twitter
  • ECS/FACEIT Counter-Strike League = YouTube

Then there are deals like Call of Duty (MLG.tv + Facebook) or ELEAGUE (Twitch + Twitter), which are shown on multiple platforms.

In addition, multiple startups are tackling the opportunity of turning passive viewing into engagement viewing.

So will Twitch sit back and let others write big checks, take their content and for startups to steal their audience?

Not a chance.

Let me be clear though: Twitch is still the undisputed leader when it comes to audience size and scale. It’s challenging to get viewers off of a platform they’ve used for potentially many years and move to another one without significant feature improvements.

When I’ve analyzed events that are shown on multiple platforms (Twitch + Facebook + YouTube Gaming), Twitch wins by a 10X factor sometimes.

Here’s just one example: While this weekend’s Call of Duty World League had about 40,000 viewers on MLG.tv on Saturday, it had ~400 viewers on Facebook – where MLG has 1.2M likes/followers.

That's a fraction of a fraction of an audience.

Here are multiple ways that Twitch is striking back.

 

VIDEO ON DEMAND (VOD)

Twitch Video On Demand (Photo: Twitch)

Twitch has primarily been a live-streaming service. But as I pointed out last year, YouTube makes a ton – the majority – of their money off VOD. Twitch finally addressed Video On Demand.

Counter To: YouTube

 

AMAZON GAME STUDIOS, STREAM+ AND IN GAME CURRENCY

Amazon Game Studio's "Breakaway" With Lumberyard Technology (Photo: Amazon)

The eSports live-viewing experience has to date been a passive experience. A “lean back” experience similar to TV.

If you look at MLG’s EVE (Enhanced Viewing Experience) with it’s fantastic live stat feature or group polls, it’s more of a “lean forward” experience. A few startups – like Genvid and Proletariat – are looking to take making eSports viewing more engaging.

And so is Twitch.

Along with the Twitch Prime announcement, Amazon made a slew of announcements including Twitch integrated games, Stream+ and an In Game Currency. Here's how they all fit together:

  • Amazon has gone on a Gaming hiring spree with industry veterans John Smedley (Ex-Sony Online Entertainment) to head their San Diego studio and Louis Castle (Ex-Command and Conquer) to run their Seattle based studio and work on another game, Crucible.
  • Stream+ provides viewers the ability to earn coins simply for watching a stream which leads to..
  • Using these coins for purchasing in-game items or "polls and wagering" aka Gambling - my guess is that these coins will be universal across Amazon Games
  • Lumberyard is Amazon's technology that enables integrated Twitch streaming for their upcoming games - that's a no brainer
  • The first game to include all of this is Breakaway which also includes: 1/ A broadcaster feature that notifies players when someone in their game is streaming, 2/ Customizable real-time stats and 3/ Ability for the broadcasters to create a community/social network for their viewers...which leads to the next product

Counter To : A whole lot of companies

 

TWITCH PULSE

Twitch's Social Platform Pulse (Photo: Twitch)

This month, Twitch launched a Twitter competitor called Pulse — an updating feed that collects photos, images, and text from Twitch users. 

FYI: Twitch is not bigger than Twitter but it's a good product.

I don't see Pulse as the biggest threat to Twitch but rather Discord, the extremely popular voice/text group chat startup. More on that later.

Counter To: Twitter (Sort Of), Discord, Facebook

 

TWITCH CHEERING

Twitch Launches Cheering Donation/Tip Feature (Photo: Twitch)

If you’re not one of the top Twitch streamers who can rely on Advertising or Sponsorships to monetize, you primarily rely on either Subscriptions or Donations/Tipping.

For a long time, Twitch’s tipping platform was handled by startups like Twitchalerts and Streamtip. With the launch of Twitch Cheering in June, they added another revenue opportunity for their platform – although I disagreed with their 29% revenue cut and thought a Branded Bits feature to sell to Sponsors would work well.

 

TWITCH CLIPS

Twitch Clips Highlights Feature (Photo: Twitch)

For years, there were several startups in the space that focused on eSports highlights directly on the Twitch platform: Plays.tv – which raised shockingly $15M from the 49’ers and the Nets Jeremy Lin – Dingit.tv, Oddshot, Forge and others.

Twitch Clips now provides the same features.

Counter To: Those guys above

 

TWITCH PRIME

Twitch Prime (Photo: Twitch)

I’m a huge fan of Amazon and Amazon Prime, their Free Shipping and access to Amazon's content via a monthly subscription.

Fun Fact: Amazon’s market cap is ~$400B and ~90% of US purchasing is still done offline. #Runway

Last October, Twitch launched Twitch Prime, which is the smartest move that Amazon had done to date.

Anyone who is a member of Amazon Prime automatically gets access to Twitch Prime. The features include:

  • Free Games
  • Exclusive In-Game Items
  • Game Discounts
  • 1 Free Twitch Streamer Subscription per Month
  • Ad Free Experience

Counter To: More accretive to Amazon/Twitch than a counter

 

TWITCH GAME AND ITEM SALES

Twitch Game and Item Sales (Photo: Twitch)

Twitch Game and Item Sales (Photo: Twitch)

Game publishers finally realized that Twitch was a phenomenal Marketing tool because they had 1) The right audience 2) Showed off the actual product 3) It’s Free and 4) Again, it’s Free.

Amazon is already one of the top game retailers in the world.

Peanut butter, please meet jelly.            

Last week, Amazon announced a Game and Item Sales revenue sharing product with their streamers. If a viewer buys either the game/in game items that a Twitch streamer was playing, the streamer gets a 5% cut.

Maybe that should be a higher revenue share but still a great move.

Counter To: GameStop, Steam, Future features from YouTube/Facebook/Twitter

 

TWITCH VOICE

Twitch Acquires Curse (Photo: Twitch)

Twitch acquired Curse last August and outside of their websites and media team – which recently did the Buffalo Wild Wings BDUBS Bowl on Twitch (Disclosure: Versus Sports EA Madden Athlete is playing in this event) – they also got Curse’s voice technology.

Discord is currently the fan favorite and has raised almost $30M. Now combine this feature with the next one.

Counter To: Discord, Teamspeak

 

TWITCH DESKTOP APP

Twitch's Desktop App (Photo: Twitch)

Take everything I've said above and see Twitch integrating into their recently announced desktop app. Voice, chat, in game integration, etc.

While this announcement didn't get the press as the previous features, if Twitch is able to build a one-stop-shop for everything within an app - that could be big.

Dear Twitch and Amazon, thank you for finally working together.

Grab the popcorn - this should be a fun battle to watch.