Twitch Will Start Selling Games And Offer A Cut To Streamers
Twitch, the game video streaming platform owned by Amazon, announced yesterday that it will start selling games via streamers’ channels. This alone is news-worthy, but what makes the announcement a potential juncture in content monetisation is the revenue share model at place. While 70% of the revenue will go to the developer, Twitch will give another 5% to the live streamer, whose channel helps to sell the game. This is an outstanding move in that it truly provides a beneficial symbiosis between all three parties, which in theory could result in a stronger ecosystem for Twitch and its owner Amazon.
Streamers are the creative lifeblood powering the popularity of the platform. This is why Twitch naturally puts a lot of emphasis on sharing various revenue channels with these creators, be it ads hosted on their channels, donations, or selling merchandise through the Twitch partnership programme. Cutting streamers into additional revenue channels enables Twitch to further strengthen the alignment of all partners’ interests with its own: to grow the platform as large and engaging as possible.
Besides keeping streamers happy and loyal, selling games directly on their channels is an appealing proposition to developers, who are very aware of the marketing power Twitch channels can posses. Placing the buy button, directly where users build their purchasing intent and fandom, opens up an effective distribution channel. The buy button limits the friction between intent and purchase, as well as incentivises immediate engagement with the game. This is driven by the fact that users can now watch their favourite live streamer and not only chat to them, but buy the game and play directly with the streamer they’ve been watching. Additionally, when users purchase a game on Twitch they will receive a randomized Twitch Crate, containing various premium Twitch Badges, Emotes and Bits for cheering streamers on chat. All this, combined with the fact that fans can directly support their favourite developer, streamer, as well as the Twitch platform with a single purchase, creates an ideal environment to foster impulse buying.
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On the other hand, streamers being rewarded for creating this impulse and helping to convert it to purchase brings its own set of challenges. Twitch is popular, in part, for the authenticity of its streamer generated content, with streamers often speaking their minds on the quality of games or the lack thereof. If streamers dilute their narratives in favour of game promotions to achieve higher revenues and tone down their authentic negative remarks in the process, Twitch runs the risk of losing some of its authenticity. Twitch has stolen a lead in live-streaming and is arguably in the best position to benefit from developments such as the rise of eSports than any other company. The challenge for the platform is therefore to gently introduce this new monetisation framework into the Twitch experience without alienating its highly engaged audience, which may not necessarily react enthusiastically to outright and flagrant integration with Amazon.