How Twitch And YouTube Are Making Video Games A Big Business

Mark this moment: Watching people play video games has become a big business, with Amazon, Google, Disney, and others vying for a piece of the action.

Call it livestream gaming: Top players record themselves playing popular titles and delivering commentary—or compete against each other in big, live, arena-style events. 

By turning video games from a solitary living-room obsession into shared events, livestream gaming is letting advertisers tap into a hard-to-reach demographic of mostly young men.

The Game Is Afoot

That means a huge influx of money into the video-game world: It’s changing from a hardware-and-software business into a Hollywood-like media operation, complete with its own celebrities, agents, studios, and networks.

The big event in livestream gaming was Amazon.com’s announcement that it will acquire Twitch, a site which specializes in livestream gaming videos, for a cool $970 million, after rumors that Google’s YouTube might be interested in buying it, too.

Gaming as a spectator sport has already attracted audiences of millions of online users, most of whom watch it on gaming-dedicated YouTube channels or on Twitch. It’s no longer an online subculture: For many teens, it is their mass media.  


And the wars to capitalize on livestream gaming and its personalities is underway. Maker Studios, a Disney-owned Web network that operates like a talent agency for popular YouTube stars, has just partnered with one of YouTube’s top gaming channels, The Diamond Minecart.

The Diamond Minecart joins two other Maker-represented gaming channels, PewDiePie and Stampylonghead. That means Maker Studios now has the top three most-subscribed gaming channels on YouTube. And it means Disney and Google have partnered up against Amazon and Twitch. It’s on like Donkey Kong!


Gamers at Insomnia 52, the UK’s biggest gaming festival.

Livestream gaming grew along with YouTube. Video-game streams were just one more genre of YouTube’s early bedroom-webcam confessionals. What else would teens talk into the camera about?

But as passionate and engaged fan communities blossomed into subcriber bases that numbered in the millions, then big businesses began to take notice.

Swede Idea


PewDiePie trying Oculus Rift, a virtual-reality gadget.

While Twitch specializes in gaming, the topic is no stranger to YouTube. PewDiePie, YouTube’s most-subscribed channel, is the online-video home of Felix Kjellberg, a 24-year-old Swede. He has 19 million subscribers, but he’s just at the apex of a community of gamers on YouTube who garner massive fan followings by uploading videos of themselves playing games. 

Some advertisers are already tapping into their popularity.

Kjellberg recently agreed to appear in a promotion for Hollywood horror movie As Above, So Below. The film’s marketers sent Kjellberg to Paris to record himself looking for missing keys within a haunted catacomb, complete with zombies and live cockroaches. It works particularly well because of the similarities to the horror-themed video games he often plays.

Video-game publisher Ubisoft partnered with popular YouTube comedy duo Smosh to create a song in 2012 for the release of Assassin’s Creed 3. The accompanying music video now has a total of 54 million views.

In 2012, first person shooter video game Halo released Halo 4: Forward Unto Dawn, a science fiction action show, on YouTube channel Machinima Prime. The show has since been added onto Netflix’s roster of content.

Entering The Arena

Livestream gaming was born on the Internet—but it’s jumping into the physical world. 

Where livestream gaming involves posting videos, esports—short for “electronic sports”—involves quasi-athletic video-game competitions, often staged in big venues before live audiences and, increasingly, broadcast on television.


League of Legends World Championships

In October 2013, video-game publisher Riot Games held its League of Legends World Championships at the Staples Center in Los Angeles. The arena was sold out, and 32 million gaming fans watched the competition online.

In July, ESPN, the Disney-owned cable network, broadcast The International, a tournament which featured an online battle-arena-style game called DOTA (Defense of the Ancients) 2, with an $11 million prize. 


League of Legends gamers.

So what can we expect for the future of livestream gaming? We’re already seeing Disney, Google, and Amazon getting into the mix, putting down eye-popping amounts of money into acquisitions and poaching top YouTube gamers.

Google and Disney’s interests are obvious, since they are big sellers of advertising with a keen interest in teenage audiences. Amazon’s interest in Twitch came as a surprise to many—but it, too, has an increasing interest in video games, thanks to its Kindle tablets and its in-house game studios, as well as in online advertising, where it hopes to challenge Google.

Others are likely to pile into the market now. The big winners may be anyone who loves video games. Heck, you don’t even have to play them anymore. You can just lean back and watch.

Lead image by Madeleine Weiss, images courtesy of Riot Games, Tubefilter, PewDiePieThe Diamond Minecart, Flickr user artubr

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