For specialist game retailers Amazon’s purchase of Twitch simply reinforces the extent to which gaming as a pastime has shifted towards the digital.

For specialist game retailers Amazon’s purchase of Twitch simply reinforces the extent to which gaming as a pastime has shifted towards the digital.

Twitch, a site on which users watch each other or professionals play, discuss or compete at video games (a pastime known as e-sports) was spun off from its generalised streaming parent Justin.TV about three years ago.

Its runaway success from that point can be measured by three milestones. The first is its ranking as the fourth largest generator of peak time US web traffic as of February 2014, some two and a half years after launch. The second is the deep Twitch.TV integration that Sony and Microsoft built into their next-generation consoles, allowing users to share and access the service on their living room TVs.

The final one is the time when 1.1 million users overcame a glorious anarchy to collectively beat Pokemon Red in a quirky social experiment.

Whilst Twitch is dominated by a large number of amateur channel owners, the site is looking to (and was originally founded to) promote the play of e-sports, and Amazon’s existing deals and relationships with content producers will place it in good stead to promote these services to a wider user base in the years to come.

The question is what Amazon is seeking to achieve with the purchase. Suggestions that it’s presciently pushing itself into e-sport broadcast before the pastime explodes into the mainstream are closest to the truth, though many commentators overestimate how popular e-sports are likely to be. The size of the market will always be relatively limited, for all its growth in the last 20 years.

It’s the dedication that viewers have – rather than the size of the market – which makes it attractive. Matches can often last upwards of two hours, many viewers are of an age where a job and disposable income have replaced the bank of Mum and Dad.

According to Twitch the average eSports fan will watch 19 matches – potentially almost 40 hours of content a week. This is no YouTube ad-blast, but rather a serious core of cash-rich users likely to become heavy participants in the service the more developed it becomes.

Will Amazon will leave Twitch as a public access service? Doing so would break protocol for the company; it prefers to use analogous services like Amazon Instant Video as value-adds to paying customers, enriching their experience.

However, doing this with Twitch would be a mistake.

Leaving the service open and ad-funded would allow Amazon a foothold in the video streaming market, would endear the company to the site’s users and would allow it to start monetising, through lucrative partnerships with manufacturers and service providers looking to reach an incredibly highly engaged audience.

This is an environment where friends can watch each other play not by travelling to a living room but by connecting over networks such as Twitch, through consoles with in-built digital delivery networks maintained  by publishers.

It doesn’t mean that the future is bleak for those with a bricks-and-mortar presence.

Twitch offers them what it offers all other comers – a chance to advertise or sponsor an incredibly engaged player-base.

Reinvention of a high street brand as an e-sports specialist will allow a relevant retailer to leverage its existing supplier contacts to provide excellent deals and offers; positioned at the cutting edge of gaming, rather than the rear.

  • Samuel Gee, senior technology analyst, Mintel