Google needs Twitch more than you might think

It’s no secret that gaming has taken over YouTube and it has happened for a number of reasons. While Movie, Television and Music industries have grown increasingly contentious as to use of their content by users on the channel, gaming companies have taken the exact opposite stance.

They have been encouraging users to use their material as a means of promotion and have even been actively defending the rights of users as seen late last year when a slew of copyright claims were made by YouTube bots on behalf of supposed content holders. Most publisher took the side of the users almost immediately.

Game publishers are smart to have a different approach to YouTube.In the case of gaming, seeing is not the same as experiencing, and one may look at hours of footage and still decide to purchase and play the game. A person may be intrigued by the art direction, story or even the musical score and choose to purchase a game to experience these first-hand and hence have full control over the experience. You can watch 100 hrs of Skyrym and still have lots to see and do if you choose to buy the game. Its also a chance for players who are new to a genre to get an idea as to how to approach a game as opposed to rage quiting the game and genre alltogether when they get stuck. Also, with the rampant sequelitis and annualization of franchises that plague the industry, it means that the viewer may turn consumer in a few short months even if they choose not to buy the current title.

To further aid in the gaming takeover, YouTube policies have seen gaming content promoted heavily. Promotion and compensation is based largely on the number of minutes a viewer watches and not simply the "views/hits" that the content manages to attract. Gaming content is far cheaper to produce than other content and hence an hour of a "let’s play” or “walkthrough” video can be achieved by anyone with capture equipment and achieve more revenue than say a five minute show which can cost thousands in comparison and make a lot less in the process.

With this rise in gaming content, engagement and thus advertising revenue has also increased on the site and Google is now showing signs of profitability with YouTube with an estimated 5.6 billion in revenue being reported in 2013. It’s very hard to decipher if profit is being made due to the manner in which they report financials but clearly, progress has been made in the attempt to monetize the platform. That money did not come from 2 minute cat videos. It came from 10+ hr game playthroughs.

However, with the launch of the 8th generation of consoles, Google may potentially find their cash cow going dry. Both the PS4 and Xbox one have decided to integrate twitch into their consoles in an effort to make it far easier for gamers to have a social experience while gaming and to make sharing of content effortless.

Twitch integration gives users the chance to interact in real-time. Now you can watch the player in real-time and help/hurt/troll/insult in real-time. If it’s one thing that gamers love, it’s interactivity and more specifically, a chance to make each other’s lives miserable. I think twitch plays Pokemon adequately proved that this platform is no exception.

As 8th generation console sales increase, users will increasingly gain access to this platform, and developers will put more effort into making games with features to take advantage of this medium. Google no doubt fears the migration of gamers away from YouTube and may now be making plans to pre-emptively secure the gaming audience, who, unlike other users, have shown the willingness to watch hours of content online. Content that is very cheap and very easy to produce. If ever Twitch were to add video archiving to their service, YouTube could find themselves with serious problems.

Finally, another advantage could be the opportunity to gain a foothold in the e-sports phenomena, which has seen growth year after year and which is set to become a major force in online entertainment. It is now estimated that the viewership for e-sports is in the vicinity of 70 million persons. The average e-sports viewer watches 19 times a month, with a session length of 2.2 hours. That’s akin to television viewership.
Take this quote from ongamers.com as further proof as to the value of this platform.

“Twitch released their own impressive report in January (2014), which includes 12,000,000,000 minutes watched per month, over 45 million unique viewers per month, 1 million broadcasters per month and 6,000,000 total videos broadcast per month. 5,100 of those broadcasters are partners, and minutes watched and videos broadcasts have doubled since 2012, with unique viewers up from 20 million in 2012. Twitch users watch on average 106 minutes of content per day.”

The value of twitch to YouTube is without doubt. The only thing to be discussed is the willingness to sell and if yes, the price. Many may consider 1 billion to be a bit much, but quite frankly, that’s a bargain price.

Gamers no doubt fear the impact that Google will have on Twitch. Their fears are well founded as Google's management of YouTube has not gone smoothly, and the awful and sometimes fraudulent copyright claims made by the Content ID system that never seem to get resolved have frustrated many users. Also, the dreaded "this content is not available in your region" (due to lisencing issues)is a serious possibility and one which may ruin the sence of community already established. Furthermore, "there will be ads", and the intrusiveness of these may become a serious issue.

Hopefully, these are not the things that they bring to twitch. The problem is that while twitch has not attracted much attention outside the gamingverse, if Google gets hold of it, changes will have to be made due to the high profile of its new owner, and that may not be for the best.

There are benefits to the acquisition though, as under the stewardship of google, twitch will have access to unprecedented resources, partnerships and experience that may see them grow to become a major player in the entertainment world. Of couse, this helps gaming as an industry as well gamers.

Twitch is a platform that gamers feel they have grown up themselves, and as with any grassroots movement, there is a deep-seated sense of ownership in the product. Its left to be seen what eventually happens and whether this merger will represent a giant leap forward or two steps back.