Youtube, Twitch & the rise of gaming

Playing games live in front of an online audience is a very lucrative business for content creators, streaming platforms and game publishers. The market is dominated by two big players at the moment: Twitch owned by Amazon and Youtube Gaming which belongs to Google. The business model is pretty straightforward: streamers are creating content and earn money by ad revenue, subscriptions, donations or external sources such as affiliate links, sponsorships or merchandise. The platforms mainly generate revenue via ads and subscriptions and game publisher are getting more sales by being present and advertising on the platforms.

Newzoo just recently released a report about the user behaviour on both platforms. Overall, Twitch is still the big dog of the game: it generated 2 billion viewing hours in the first quarter of 2018, compared to 0.4 billion on Youtube Gaming. Twitch also dominates the long tail: while on Youtube Gaming 42% have been generated by the top 100 games it was only one-third on Twitch. One reason for that is the sheer number of creators: Twitch had 65K channels that reached 50 or more concurrent viewers at least once – Youtube Gaming only had 25K with a similar viewer base.

Youtube Gaming & Twitch
Jurre Pannekeet | Five Key Insights into Twitch and YouTube Gaming and the 2.4Bn Viewing Hours They Generated in Q1 2018 | April 2018

And while Twitch is also stronger when it comes to the most views for core AAA titles (82% of the total viewership hours in Q1), Youtube Gaming dominates within casual and mobile games. Five out of the twenty most watched games on Youtube Gaming are mobile: Mobile Legends, Clash Royale, Arena of Valor, Garena RoV, and Monster Strike. Twitch doesn’t have any mobile title in its top 20.

One reason for the popularity of Twitch and Youtube Gaming is the ever growing games market. According to another report by Newzoo, gamers will spend $137.9 billion on games in 2018 compared to $121.7 billion the year before. A trend that doesn’t seem to slow down: Newzoo is predicting a consumer spend on games of $180.1 billion by 2021 – that’s an annual growth of around 11%, mainly driven by mobile games.

Global Games Market
Tom Wijman | Mobile Revenues Account for More Than 50% of the Global Games Market as It Reaches $137.9 Billion in 2018 | April 2018

In order to reach that gaming audience as an advertiser, both Twitch and Youtube offer different solutions. First of all, the two platforms are accessible via programmatic buying: you can buy ads via an ad exchange through a Demand Side Platform (DSP) of your choice or the DSPs owned by Google (DoubleClick Bid Manager) and Amazon (Amazon Advertising Platform). The big advantage is that you can fully control biddings, budgets and targetings on a self service base. But it requires expert knowledge in performance marketing and media buying or an agency who is managing it for you.

If you are looking for an easier approach that can be managed in-house, both platforms offer alternatives. Youtube Ads are available through Google Adwords – you can think of it as a streamlined DSP that is only offering Google’s ad inventory, including Youtube. Twitch is following a more old school approach by selling ads through their sales team – so yes, you have to talk to real people. When it comes to ad formats, both platforms offer a combination of standard IAB formats, short pre-roll clips and site takeovers.

Twitch Ad Formats
Twitch Ad Products | | 18 May 2018

For more information about the gaming market and streaming platforms, check out the following links: Five Key Insights into Twitch and YouTube Gaming & Mobile Revenues Account for More Than 50% of the Global Games Market as It Reaches $137.9 Billion in 2018.

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