Gaming’s Killer App: Twitch?

Twitch on Xbox One

While I try to stay on top of the new shiny in all media, I typically avoid being an early adopter of anything, especially when it comes to technology. Surprisingly, I snagged an Xbox One Day One Edition, partly because my non-gaming wife was intrigued by it, and three months in… I regret nothing!

I’ve thoroughly enjoyed several of the first wave of launch games, including Forza 5, Need for Speed Rivals, Killer Instinct, Peggle 2, Tomb Raider, and Rayman Legends; and I spent several hours last week enjoying the hell out of the Titanfall Beta. Beyond games, I consider Xbox Fitness a killer app that nicely demonstrates the huge improvements in Kinect while only hinting at its true potential.

In fact, it’s the non-gaming aspects of the Xbox One that I find most intriguing because I don’t believe “next gen” will ultimately be defined by graphics, and the first real example of that is Twitch.

What is Twitch?

Funny you should ask. But first, some context…

Gamers on YouTube: Evolving Video Consumption

First, as gamers moved from researching to purchasing and playing, we discovered that they viewed brand released and community-created videos, but relied on them at different times. Before a game came out, fans mostly watched content released by the brand, such as announce, gameplay demo, and launch videos. A previous study found that 92% of gamers research a title before buying, and that brand-released game video is the most influential piece of publisher content.

Post-release, those who purchase a game switch their attention to advancing through it and engaging with that game’s community. Our data showed this in action, as walkthrough, how-to, and game powered entertainment videos became the focus after launch. Looking at the lifecycle of a game from pre-launch to post-launch, community-created videos effectively doubled the amount of views the top selling games would have received through brand-released content alone.

tl;dr: “Gamers are an important driver of brand engagement, as they create, curate, and share content.”

And that’s where Twitch comes in and things get really interesting.

One million broadcasters strong, Twitch surpasses Facebook in peak traffic

Netflix, Google, Apple, Twitch. Which one of these companies doesn’t fit with the others? Twitch, the startup which lets players broadcast and watch live streams of video gaming action, is not yet a huge public company. Yet it ranks among these web titans as one of the largest sources of broadband traffic during prime-time hours, according to a new study from the cloud and network infrastructure firm DeepField.

Twitch announced today that is now has more than 1 million different users broadcasting on its platform each month. That helped it push more traffic across the web than big names in the streaming video and music business like Hulu, Amazon, and Pandora…

The rapid rise in broadcasters is due in part to a new platform for Twitch’s streaming service, a home-console system. Before the release of the newest Playstation and Xbox units, Twitch was for PC gaming only. “About 20 percent of our broadcasters are now coming from the Playstation 4,” says DiPietro. “That shows us there is a whole new audience with a hunger for the ability to stream their games.” Twitch also integrates with the Xbox One, though that feature has not officially rolled out yet.

How Twitch is crowd-sourcing an amazing Pokémon multiplayer game

Twitch Plays Pokémon was launched less than two days ago but has already amassed an impressive viewership. More than 175,000 people have watched and played Pokémon Red/Blue through the Twitch channel. And slowly but surely, and with thousands of luckily timed and errant commands, players are making progress. Earlier today, the game’s thousands of players managed to defeat the Pokémon trainer Misty.

Can 80,000 people play this video game together?

The page has been viewed more than 10.6 million times, with the number of active users peaking at about 81,000.

“This is one more example of how video games have become a platform for entertainment and creativity that extends way beyond the original intent of the game creator,” said Matthew DiPietro, vice president of marketing for Twitch. “By merging a video game, live video and a participatory experience, the broadcaster has created an entertainment hybrid custom made for the Twitch community.”

Twitch game streaming coming to Xbox One on March 11

The feature will be patched in to Microsoft’s console for the North American release of Titanfall. Twitch adds the ability to live stream games, join games with broadcasters, use voice commands to create your own game broadcasts, archive game clips, and later watch those clips on any device…

“From the broadest perspective, live video is becoming the social connective tissue in the gaming community,” vice president of marketing for Twitch Matthew DiPietro told Polygon last year. “The way families use Facebook, gamers are using Twitch. Watching gameplay has been a part of the game experience since the very beginning, since I was 8 watching my brother play Space Invaders on Atari. This has always been part of the experience. We just have taken it and put it in 2013, in a world where we have broadband capability and 24 hour internet.”

I’ve messed around with Twitch a little bit, mainly to check out games I’m curious about (eg: Project Spark looks amazing, and could be yet another killer app for Xbox One), but my general experience with gaming videos is right in sync with Google’s findings:

Community-created videos effectively doubled the amount of views the top selling games would have received through brand-released content alone… Gamers are an important driver of brand engagement, as they create, curate, and share content.

User-generated content is as valuable (and sometimes even moreso) than branded content, and that applies to both pre-purchase research and post-purchase engagement.

Combined with its already solid PC and PS4 connections, Twitch’s even deeper integration with Xbox One has it poised to become gaming’s killer app. And with valuations of far fluffier companies like Instagram and WhatsApp going through the roof, how long before Google or Amazon (or, god forbid, Facebook) comes knocking at their door with an offer that will be hard to refuse?

UPDATE: Not long at all, apparently!

YouTube is indeed close to securing a $1 billion buyout of live-streaming service Twitch, and will have fended off multiple suitors including Microsoft if the deal goes through, according to people with close knowledge of the talks. The two companies have agreed on a price and are working out details such as how independent the Twitch company and brand will remain, said one person close to the deal who asked to remain anonymous. Twitch is said to have evaluated possible bids and decided on Google’s YouTube as the best fit to help the company scale in line with its massive growth over recent years.

Interestingly, Facebook acquired Instagram for $1 billion, too, but I suspect Google is going to see a far more immediate and viable return on their investment via Twitch, as long as they don’t push the integration with YouTube too hard.

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Guy LeCharles Gonzalez

As in guillotine. Old/new media pragmatist. Sometimes loud, one-time poet, still opinionated. Reading, writing, running, gaming, soccer, beer.

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