Twitch, the video streaming platform Amazon bought for almost a billion pounds in 2014, recently announced that it would supplement its Twitch Prime s
Twitch, the video streaming platform Amazon bought for almost a billion pounds in 2014, recently announced that it would supplement its Twitch Prime service with a store for digital games, DLC, and other content. It’s Amazon’s latest shot at monetising the service (beyond t-shirts and premium emojis) but the PC gaming community is perhaps a little too fragmented for it to pay off.
From casino to “idle clickers”, PC is one of the more fertile grounds for developers, the original home of modding, and the easiest platform for bedroom creators to cut their teeth on. Sites like Kongregate have kept PC gaming almost completely free, while Mobilewins.co.uk is pushing innovation in iGaming, a niche that has an almost ironic position in the high-tech future, given that it’s based upon the paper and plastic of playing cards and dice.
For all the experiences on offer though, games tend to come from a very small number of stores. For example, Mobile Wins has the lion’s share of the internet’s most popular slots, like Starburst and Thunderstruck II, in addition to a range of table games. Similarly, with Valve’s Steam store attracting 14m concurrent users as of January 2017, it has something of a monopoly on more conventional video gaming.
With the previous in mind, Steam’s rival stores like Origin, GOG, Kinguin, and Humble Bundle appeal to customers almost purely through some kind of gimmick. For example, GOG strips DRM from its games, Kinguin resells unwanted game keys, Humble Bundle trades PC titles for charitable donations, and Origin maintains an exclusive catalogue of EA games.
Twitch has at least begun on the right foot – it’s not just selling games. People who spend over £5 will receive a Twitch Crate with items to use around the website, such as chat emotes, badges, and “bits”, which can be used to “cheer” for a streamer. It’s a nice gesture but it has greater uses in customer retention than acquisition – unless Twitch can offer lower prices, its new offering appeals mainly to its own audience.
It’s worth noting that Twitch’s new shop may not take the form of a store at all, instead appearing as an advert on a streamer’s page (YouTube operates a similar model with links to an artist’s music under related videos), allowing viewers to purchase direct from the developer, who gets 70% of the profits. Twitch pockets around a quarter of the money, with the streamer earning 5%. It’s not an immediate cash cow by any means.
It’s hard to make a game store pay. French site DotEmu shut up shop towards the end of March because “competition is fiercer than it used to be”, while even the less profit-focused ventures like Humble Bundle have a sideline in subscription services. The one advantage Twitch has right out of the gate, though, is an established user base interested in its product. It also has Amazon behind it, a situation that could be critical in the new store’s success.
As far as downloadable games are concerned, Amazon rarely gets a mention in the same breath as Steam and Origin but funneling its game store through Twitch might serve as a secret inroad into that market, even if the entire customer journey is branded in the latter’s trademark purple. The concern is that rewarding the streamer too gives them an incentive to plug games by default, giving the entire platform a more promotional feel.
As a tool to enhance its own community, Twitch’s new outlet could be a great idea; the audience becomes self-propagating – viewers buy games, receive community focused rewards, and maybe start streaming themselves – but it still needs that sales gimmick, a way to get new customers on board. Hosting previews and trailers with pre-order links is one option, as is selling games during eSports tournaments.
Twitch arguably needs to lean on exclusivity to compete with Steam – it’s a maligned concept but being able to “own” something before Gabe Newell or YouTube get their hands on it could give the website an advantage, especially given that it already has an existing relationship with Ubisoft. Imagine, for example, getting exclusive rights to pre-sales of Assassin’s Creed or the trailer of the next Far Cry; it’s almost a licence to print money.