Why Amazon should tread carefully in the wake of its Twitch.tv acquisition
A view from Richard Smith

Why Amazon should tread carefully in the wake of its Twitch.tv acquisition

Amazon pipped Google in the battle for Twitch.tv, the live streaming video platform which focuses on gaming-related content. Richard Smith, account director, business planning - intelligence, at Mindshare UK, explains why Amazon paid nearly $1bn for the platform.

When I talk to my peers about the concept of Twitch.tv – that millions of people around the world will watch others game online and actively broadcast their own game play - it leaves most non-gamers quite perplexed.

Users viewed 15 billion minutes’ worth of content in July

At first glance it’s easy to dismiss the appeal of Twitch as a niche and nerdy behaviour of a minority of hard-core gamers. Now that Amazon has just gazumped Google to buy the world’s leading game-streaming service for $970m, the non-gaming world has been forced to take note. This acquisition is important for a variety of reasons, but crucially to the marketing world there are a couple of key things to note.

Audience - the opportunity, and the word of warning

Young male audiences are notoriously difficult to reach at the best of times, let alone engage with in meaningful ways. Platforms like Twitch manage to achieve engagement levels that most brands would die for. In the US, Twitch has a relatively modest 55 million unique users each month which might not seem that big, but as those users viewed 15 billion minutes’ worth of content it’s no surprise that Twitch gets more peak broadband traffic than Facebook – and stands up against the main US cable networks at peak time for viewership figures.

These audience numbers are nothing new and the brand presence has been part of Twitch for a while, but with Twitch being bought, for a fifth of Amazon’s piggy bank, it will hopefully act as a wakeup call to marketing teams that gaming represents a huge opportunity and now is the time to get involved. Amazon will clearly have the keys to a very powerful marketing tool, and whilst Amazon has been quite clear that Twitch is not going to change, the opportunity for Amazon to become an extremely powerful media owner will surely be exploited in the not-too-distant future.

Twitch will need to be careful not to sell out its heritage of hard-core gaming

Gamers are however, a fickle bunch. They voice their concerns more than most other communities and Amazon will have to be careful when seeking to expand the level of advertising that Twitch users are exposed to, or suffer some very verbal feedback.

Likewise, if Twitch is to begin to tread down the mainstream gaming pathway that Amazon has been expanding into already (Amazon is set to release Amazon Fire TV – a modestly priced console aimed at the casual-family market) then Twitch will need to be careful not to sell out its heritage of hard-core gaming otherwise those gamers will go elsewhere.

Amazon’s growing sphere of influence

Amazon already own studios; the company publishes games and creates gaming devices (Fire TV box), and of course sells games. Now that they have the ability to promote games too through Twitch TV, it doesn’t leave much of the gaming world that they don’t have an active interest in.

Amazon has put many book publishers into difficult positions due to their retail power, witness the current fight with Hachette, but now consider that Amazon control not just a significant portion of gaming retail, but also the means of promoting it via Twitch as an extremely popular gaming platform. Surely it won’t be long before Amazon tries to exploit their retail and promotional capabilities for financial gain?

Amazon have been trying to get a greater stake in the future of gaming for some time; acquiring studios, creating consoles, publishing and selling games, but everything they’ve done so far has been more about the casual and mid-tier gamer, so the purchase of a hard-core gaming platform is a bold move.

To get the drop on Google – which has so far failed to crack live-streaming on YouTube - is a massive coup. However, it will be a fine line that Amazon has to walk to preserve the legions of dedicated gamers that made Twitch what it is, whilst growing Twitch into the mainstream as Amazon will undoubtedly want to do.

What is Twitch.tv?