By Morris Garrard, Futuresource Consulting
Amazonâs content streaming platform Twitch is facing intensified competition, with Google, Facebook and Microsoft reaching into their pockets in a bid to dethrone the gaming communityâs go-to video sharing platform. Recent developments will have considerable implications for the composition of the esports and gaming broadcast landscape, with Twitchâs two main rivals, Microsoft owned Mixer and YouTube Gaming, increasing their esports influence, whilst Twitch is forging a new community outside the gaming circle.
Last week, Activision Blizzard, the publisher of esports phenomenon Overwatch League (OWL), announced that the franchise would be leaving Twitch in favour of a new partnership with YouTube Gaming. This follows the expiration of the $90 million, two-season exclusivity deal signed by Twitch in 2018. The 2020 season kicks off on February 8th with a match between Paris Eternal and Toronto Defiant in New York, with seven further games taking place in the first weekend. Alongside OWL, Activision Blizzard has also partnered exclusively with YouTube Gaming to broadcast popular esports franchises Call of Duty League and Hearthstone.
Activision Blizzardâs departure marks the second serious dent to Twitchâs offering in the last six months, the first being Mixerâs acquisition of Fortnite superstar Tyler âNinjaâ Blevins, who boasted 45,000 paying subscribers and 14 million followers on Twitch. In August 2019, Ninja began streaming exclusively on Mixer, and now streams to over 2.3 million channel subscribers on the site.
This shift is significant for the competitive landscape of esports broadcast, where gaming leagues and streaming personalities attract sizeable and loyal fanbases, that are ready to change viewing habits to access their preferred content. The OWL Grand Finals in 2019 drew an audience of over 1.1 million fans, with the growing OWL fanbase now expected to watch the 2020 tournament live via YouTube. Gaining the broadcast rights to OWL therefore poses a significant opportunity in terms of attracting and retaining viewership for YouTube Gaming and the wider Google Gaming brand. Exclusivity is the key to securing viewers; the broader the portfolio of exclusive titles, the stronger the broadcaster becomes. Twitch has dominated the streaming war since its launch in 2011, becoming the go-to streaming site in Europe and North America. Twitch has previously held the upper hand with the site being the go-to destination for game streaming, boasting a significant userbase and therefore being home to high profile streamers and leagues. However, since the 2015 launch of YouTube Gaming, 2016 launch of Mixer and most recently the 2019 launch of Facebook Gaming, it now faces well-funded competition, with brands able and willing to spend big on attractive content.
Over the last decade, Twitch has benefitted form the major growth of esports tournaments. With Twitchâs substantial existing audience, and ability to monetise viewers, the site became home to streams of competition, as tournament organisers sought to gain an audience. Twitch has frequently been considered the âYouTube of Gamingâ, highlighting its dominance in gaming AVoD. However, tournament saturation is now biting, with most major titles hosting major international competitions, leaving limited opportunity for new competitions to steal the limelight. While esports fan numbers are expected to increase, with a worldwide 2019-2023 CAGR of 13%, tournament volume is expected to grow by just 2% CAGR in the same period, resulting in an increasing viewership per tournament. Exclusivity deals provides streaming platforms with the ability to secure revenue opportunities set only to increase, as esports fanatics grow.
Whilst the loss of Ninja and OWL have certainly made a dent in Twitchâs esports dominance, the streaming site remains key for several tournaments. Twitch still has the Western rights to broadcast the hugely popular League of Legends Championship Series and the Dota 2 Championships, both of which boast large viewer numbers. The challenge from Microsoft, Google and Facebook has certainly been felt by Twitch, with the platform looking to diversify its offering through non-gaming related content. This has seen recent success with the âJust Chattingâ category, which has become one of the most popular on Twitch and has ventured into securing rights to stream TV content, with rights to stream Bob Ross content as one high-profile example.
Overall esports remains a high growth sector in media and entertainment, and the market opportunity has attracted the attention of major blue-chip companies, ready to bankroll heavy user acquisition strategies. With annual industry revenue expected to reach $1.8 billion in 2023, companies are now making strategic plays set to influence the esports landscape in the coming years, securing relevance and revenue opportunities for years to come. However, the market has certainly seen increasing competition in the last year, affecting the current status quo, and disruption is expected in the years to come.