In his latest column, Tom Waterhouse of Waterhouse VC analyses the popularity of gambling streamers, charting the rise and fall of Twitch and the success of its rival, Kick.
The rise of pro gamers and dedicated fan bases has boosted user numbers on streaming platforms like Twitch. Amazon purchased Twitch in 2014 for $970m, just three years after its 2011 launch. The opportunity in streaming is vast, with just a handful of platforms dominating the US$3.8bn industry.
Audiences converge to take part in gameplay, tutorials and social chat rooms, hosted by their favourite gamers. Most platforms are free of charge for both streamers and their audiences.
The platforms monetise their audiences through advertising and by taking a portion of premium subscription revenue and merchandise sales. On Twitch, there are three tiers for those wanting to subscribe to a streamer: $4.99, $9.99 and $24.99 per month.
Altered subscription revenue split
In the case of Twitch, subscription revenue was split 50/50 between the platform and the streamer. This was until June 2023. when the split was adjusted to 70/30 in favour of the streamer.
Twitch also has “Bits”, which is the platform’s internal currency used by viewers to support or tip the streamer. Revenue generated through Bits is split between the streamer and the platform. This is according to several factors, such as the streamer’s popularity and their location.