Brave new audience: 1,085,062 viewers can’t be wrong

The appetite for live-streams of people playing games has been growing. Facebook, Alphabet, Amazon, Tencent, and others have been making increasingly larger investments in gaming video content. That makes the latest record viewing session interesting for several reasons.

First, YouTube, despite struggling to keep up with Twitch, is clearly not to be counted out. Its subscriber model and user base give it a lot of reach. A lot.

Twitch’s need to keep innovating as fast as it can is a second point of interest. Compared to YouTube it lacks the ability to direct comparable traffic volumes.

In what was likely the most robotic television interview I’ve seen in a while, Twitch’s CEO recently shared some of his thoughts on Twitch’s strategy. Key components involve expanding “adjacent content” and “doubling down on gaming.”

On the short term Twitch will undoubtedly continue to dominate: its ability to aggregate hundreds of thousands of realtime audiences continues to be a clear strength. And the backing of Amazon Prime, which basically allows it to give things away for free, ensures effective user acquisition. For now. Longer-term I have yet to see how Twitch will woo Riot Games and prevent it from dis-intermediating. (Riot accounts for roughly one third of total viewership.)

Until then Twitch will continue to benefit from the explosive success of titles like Fortnite as audiences tune in to see their fave celeb play or learn about the best new games.

Its focus on gaming gives it an edge, but also means there are few parallel content categories (e.g. music, movies, etc.) that it can draw from to boost the numbers in its gaming segment. Consequently Twitch is going to have to compete on finding innovative new ways to attract and retain its audience.

Third, instead of English, this headline revolves around a Spanish-speaking group of YouTubers. English isn’t everything. Yes, last year around 2.9bn hours were streamed on Twitch in English compared to 99 million in Spanish. But this play session should remind advertisers and content creators alike that this a global audience. To be part of the conversation doesn’t mean they all have to speak the same language.

Particularly in China there’s been a lot of activity around gaming video content. This week Bilibili is scheduled to go public. With 78.4M monthly actives (first two months 2018, +45% year-over-year) and the bulk of revenues from mobile gaming (83%) the firm’s fortunes have largely improved because of, you guessed it, mobile games. Of note are (1) the high rev share with content owners which run around 48%, and (2) its server costs (24%). Foundational to Bilibili’s success and ultimately its IPO is its spectacular year-over-year growth rate. The company is one of the leading gaming video content sites in China and competes with Douyu and Huya, which are also eyeing US-based IPOs.

Finally, speaking of finance, Wall Str. is concerned that Fortnite’s success is chipping away at the monthly active user base and spending for GTA VBattlefield 4FIFA18Overwatch, etc. Don’t worry, say all the legacy publishers. But all those users and viewers must be coming from somewhere.

The popularization and globalization of video games is quickly changing what success looks like.

Better tune in.

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