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Yesterday the premier live streaming platform Twitch announced it will soon be the best place to buy games. This move marks another step of Twitch integrating more services for its users, continuing their focus on building a community-based ecosystem.
In August 2014, Amazon acquired Esports streaming platform Twitch for $960M, marking the biggest acquisition in the Esports space. On Twitch fans can interact with their favorite streamers using a unique language of customized emoticons and Kappa’s, creating higher engagement and retention than linear broadcasts.
Fans typically go to Twitch to consume content, learn about video games, and watch their favorite streamers play their favorite titles. Now Twitch announced that it will partner with developers to sell games, which will provide fans the opportunity to not just watch a game, but to immediately buy it without leaving the site. When fans buy a game in a streamer’s channel, the streamer gets 5% of the purchasing price, creating yet another way in which people can support streamers. As an additional incentive, the purchaser will receive a crate, which comes with random and customized rewards, such as exclusive emotes, chat badges, and Bits.
Twitch has always been the best place to watch, share, and play games. Soon, it will be the best place to buy games! https://t.co/UOfAqGnz1d pic.twitter.com/8JWzVGxHP2
— Twitch (@Twitch) February 27, 2017
With the increased competition from YouTube Gaming and Facebook Live, Twitch is building an ecosystem based on providing value to its community and thereby increasing retention. Twitch has done an incredible job when it comes to adding value propositions that deeply matter to their users while generating revenues for Twitch. Some examples include:
- Twitch Prime: After its acquisition by Amazon, Twitch implemented Twitch Prime which provides free loot and ad-free streams. Amazon Prime customers automatically gain a Twitch Prime membership when connecting both accounts.
- Twitch Bits: Twitch implemented Bits, a digital currency users can purchase and show off in a streamer’s channel through an animated emoticon. The more you spend, the better the animation.
- Curse Acquisition: Twitch acquired Curse, a company featuring a database of gaming-related wikis, a network of gaming news websites, a VoIP service, MMO mods, and a former League of Legends team. While Twitch hasn’t announced specific details, a press release confirmed that the acquisition will help gamers connect, interact, and share information with one another.
- Communities: Twitch introduced communities, a new social way to discover content.
- Stream+: Twitch and Amazon announced a new virtual currency, Stream+, as a way to earn loyalty points and wager them.
You can read more about these features in our Twitch 2016 review.
Twitch is under pressure to defend itself against Youtube Live and Facebook entering the streaming market. Twitch does this by supporting subculture-like communities and by retaining top streamers through new monetization paths besides subscriptions and donations: bits, prime, and now game sales are all part of this strategy. As long as streamers chose to use Twitch, the platform will be able to protect its monopolistic grasp on the games streaming market.
At the same time, by selling games, Twitch moves closer to Amazon’s core business, but could end up alienating its partner publishers. According to Polygon, Valve and Riot Games are not listed as partnering developers although League of Legends, Dota2 and CS:GO drive a huge chunk of Twitch’s viewership. For Dota2 and CS:GO, Twitch moves into competition with Valve’s Steam, the company driving traffic and viewership to Twitch. So far Twitch has been a great tool for game developers to show off their games to a wider audience. If Twitch is able to prove itself as a successful sales channel, we will see more devs/studios join in to show off and sell their games.