In 2014, the shipping giant Amazon bought the streaming platform Twitch for 970 million US dollars. Over the last 10 years, some people have become rich through Twitch, even if they didn’t have a high school diploma and didn’t look like the typical success story – but Amazon itself is now struggling with the purchase, as has recently been revealed.
This is the positive side of Twitch:
- One must always keep in mind that only a few streamers on Twitch earn a lot of money, and the vast majority stream purely as a hobby and hardly make any money. According to a statistic, in 2021, 75% of all streamers earned less than 120 dollars a year.
- However, there are examples of some streamers who have become millionaires or at least very wealthy through Twitch, even though their biographies did not exactly predict this.
- In Germany, for example, MontanaBlack became a “Junkie to Millionaire“, as the title of his biography states. The Luxembourger LetsHugo left school without a diploma to launch his career on Twitch. Opportunistic individuals like the “shameless e-girl” Amouranth or the gentle capitalist Unge have now achieved a Scrooge McDuck level of wealth.
Twice as many users as in 2019 – but no increase in revenue
Is it worth it from Amazon’s perspective? No, for Amazon, the purchase does not seem to have been worth it after 10 years. As a report from the Wall Street Journal shows:
- The number of users has doubled since 2019
- However, revenues with 667 million dollars are approximately at the level of 2019
As Dotesports knows, those who spend the most money on Twitch are losing interest in the platform.
According to the report, Amazon fears that Twitch could become a “zombie brand”: there are concerns that it has acquired a young emerging platform that then stagnates and is overtaken by competitors. This has already happened with other companies like Goodreads.
According to the report, another wave of layoffs could hit Twitch. They are simply lacking money.
Recycling on YouTube is a problem
What is the reason for this? A major problem with Twitch is that some streamers do not like to run ads because it disrupts the streaming flow and annoys viewers. US streamer Asmongold even completely avoids ads on his secondary channel, which costs Twitch a lot of money each year because although he does not generate money for Twitch through advertising, Asmongold causes enormous server costs due to his reach.
Streamers like Asmongold or MontanaBlack use Twitch to create content in streams and also gladly take the money from Twitch subscriptions.
Many streamers earn the bulk of their income through recycling their Twitch streams on YouTube. For this, they hire editors who cut their Twitch streams into bite-sized pieces for YouTube, where several videos appear per day – and these are heavily monetized.
As MontanaBlack reveals, he earned in 2023:
- about 1 million euros on Twitch
- but 2.2 million euros on YouTube – most of it from recycling his Twitch streams
The streamer Amouranth is even more extreme. She sees Twitch as a “advertising platform that pays you to run ads there”: She is only on Twitch to attract customers, who she then directs to her actual sources of income, paid platforms like Onlyfans.
Amazon CEO under fire
How are the employees reacting? The employees seem to be directing their frustration primarily at the new CEO Dan Clancy . Employees are reportedly appalled that he attends public events like TwitchCon and dines with streamers there.
Clancy, however, considers this normal behavior: if he had a factory, he would meet with raw material suppliers and vendors. Streamers fulfill the same function for Twitch.
The fact that Twitch is not doing as well as it used to and that they are tightening their belts is evident from the increasing ad insertions on Twitch – but also from the fact that they are clearly saving on contracts: The days of big million-dollar deals for streamers on YouTube and Twitch seem to be over.
