Level 61: Powered By Twitch
Twitch as an API, Xbox's increased centralization, and a mathematical perspective on Slay the Spire
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📜 This Week’s Notable News
Twitch’s Backend Hits the Market: Purchasing Twitch for ~$1B back in 2014 was one of the smartest business moves Amazon has ever made. The company is valued today somewhere near ~$4B, and has become a household name, drawing in hundreds of millions of users over its lifetime. However, as with any acquisition, Amazon’s purchase was based not on what Twitch is today, a games streaming platform; rather it’s what Twitch has the potential to be: the internet’s premiere platform for anything and everything streaming.
Amazon’s approach to this ambitious goal has come into many forms: investing in non-gaming content, finding new ways for consumers and creators to interact, creating new ways to monetize live video, and now, making the technology powering Twitch available to everyone. Late last week Amazon announced its “Interactive Video Service” — a corporate packaged version of Twitch’s video technology . The service allows anyone to take an existing video feed and turn it into a full fledged live stream, complete with Twitch-level customization (like chats or polls) and zero input delay between the streamer and viewer.
The risk to Twitch of releasing a service like this is minimal — the product is priced in a way that makes operating a consumer-facing platform like Twitch’s financially impossible. What is interesting, however, are the numerous other use cases that this technology could create. Suddenly schools no longer need to cram students onto a Twitch or Discord channel to stream classes, instead they can build their own sites, powered by Twitch. Existing streaming sites get a boost too - not having to program a high quality video streaming platform saves tons of money and time.
While it may be marketed as a technology service, make no mistake, this is another step in making Twitch the world’s premiere streaming platform. Remove the channels, personalities, and branding from Twitch, and it’s essentially the same thing as Amazon’s new service. While it may seem outlandish today, it’s very realistic that we might only be a few years out from Twitch’s streaming technology powering our online classes, video chats with friends, and live streams.
💡 Industry Content
Xbox Integrations: Ahead of its next generation console launch, Xbox has begun to merge it’s various service offerings. For context, Xbox offers users three separate services:
Xbox Live Gold ($9.99/month) — a subscription to Xbox’s online multiplayer service
Xbox Game Pass Ultimate ($14.99/month) — access to a library of hundreds of Xbox titles to play anytime
xCloud (Price TBD) — a game streaming service that lets users play Xbox games from any device
Or at least that’s how it used to be structured until this week’s shake up. What has been confirmed is that xCloud has been folded into Game Pass and that Xbox Live Gold has been nixed (presumably also to be folded into Game Pass). The move makes sense, as Xbox reported in its earnings call yesterday that they have 100 game studios creating for their Game Pass subscription and over 100M subscriptions. Bundling the other two offerings will only enhance the perceived and actual value of the service. As Xbox pursues the subscription model via Game Pass, it’ll be interesting to compare it to Playstation, whose primary focus is exclusive first party titles instead of services. Link
Q2 Gaming Investments: Despite today’s uncertain economy, investments in the games industry don’t seem to show any sign of slowing down. VentureBeat highlighted the nearly $8B in Q2 gaming investments, a 3.1x increase from last quarter. Most venture investments continue to focus on the mobile gaming space, in part due to the medium's rapid growth in the West and high money-making potential. Link
TikTok — The Next Frontier for Gaming: Last week we discussed Sea Limited, and the concept of a “super-app”, an all-in-one platform that serves as a go to for everything from commerce to communication. This week we continue to see the concept in action, as industry analyst Daniel Ahmad highlights TikTok owner ByteDance’s recent gaming content hire. Games continue to serve as massive revenue generators for many of these platforms — thanks in part to their versatile monetization strategies. It wouldn’t be surprising to see some of these “gamification” concepts trickle down to U.S. communication apps in the near future (see 8-Ball in iMessage). Link
Exposing Ubisoft’s Toxic Culture: After reporting the exit of three key executives following allegations of sexual assault and harassment in the workplace , Bloomberg’s Jason Schreier has released a deep dive on the company’s deeply rooted issues with sexism. Featuring interviews with numerous employees, Schreier highlights many of the systemic issues that plague Ubisoft (such as the idea that “any game with a female protagonist will never sell”). Accountability drives changes in any industry — all eyes are now on Ubisoft to prove they’re serious about fixing what has so clearly become a toxic work environment. Link
🎮 Fun & Games
The Brain Behind Evil Genius: A 21 year industry veteran, Evil Genius (“EG”) was once celebrated as one of gaming’s cutting edge competitive teams, credited with building the playbook on how to run an esports organization. But in the diverse landscape of modern esports teams, being the first mover isn’t enough anymore. In this interview, The Washington Post sits down with EG CEO Nicole LaPointe Jameson as she lays out her journey from Private Equity to CEO, and her plan to help get one of esports most famous brands back on top. Link
Logic Comes To Twitch: Twitch signed rapper Logic to a reported seven-figure exclusive partnership deal. The move is the first of its kind for Twitch, whose previous exclusive contracts have centered around gaming-focused creators like Dr. Lupo or Summit1g, most of whom built their following on the platform itself. As services like VENN (featured in last week’s newsletter) continue to double down on creating content for the gaming community, Twitch is increasingly looking beyond its core fanbase. Link
😎 Other Cool Reads
Seeking Perfection in Slay The Spire: If you optimize play for every iteration of Slay the Spire, can you have a 100% win rate against the game’s procedurally-generated randomness? The answer: yes and no. Slay the Spire master, Forgotten Arbiter, dives in on a mathematical (reminiscent of chess strategy) approach to winning the hit-indie game. Link
The Art of Breathing: Naughty Dog developer Beau Anthony Jimenez explainsthe Breathing system behind the recently released Last of Us: Part II. Jimenez outlines how the system is built on two underlying pillars: Murmuration and Heartbeat. Murmuration exists as constant breathing, with Heartbeat acting as the multiplier to determine its intensity. Link
The US Military Is Using Twitch to Recruit Teens: The glamorization of the American military in video games has never been subtle. Popular games like Call of Duty and CS:Go are entirely built around the concept of the US Army being the “good guys”. It will come as no surprise then, that the military is leveraging these popular titles by streaming them directly on Twitch. The implications behind this are somewhat predatory — how can you expect a kid who’s only experience with the military is COD to know better when a streamer tells them they should enlist? It seems American politicians are already thinking the same, as many are calling for legal action against the Armed Forces. (Editor's Note: As of late Wednesday afternoon the Army has paused all activity on Twitch for the foreseeable future due to legal pressure) Link
📊 By The Numbers
The creator of Mario makes $1.8M/year — a look into the compensation for Nintendo executives Link
Total consumer gaming spend in across June totaled nearly $1.2B — the highest since June 2009 Link
😍 Our Current Favorites
Fawzi (@fawzitani): I keep thinking about Discord’s recent $100 million funding round that we covered a few issues back. Obviously, we — as gamers — all love Discord. But as more unprofitable startups come under increasing scrutiny, what’s the bull thesis on Discord for these investors? Discord Nitro literally makes <$2 million and yet the communications platform has over $350 million dollars in funding to date. I’m writing down on my thoughts and will get it to y’all soon — would love to get your feedback, so stay tuned!
Max (@MaxLowenthal): I have incredibly fond memories of the original two Paper Mario games, and have spent years looking for a title that recaptures the essence of the series. Thanks in part to the release of a new (and disappointing) Paper Mario game last week, I was pointed to Bug Fables: The Everlasting Sapling, a turn-based RPG that’s heavily influenced by the original titles. The game manages to capture the idea of “spiritual successor” in every sense of the word, despite having totally different characters, locations, and story. I’ve already sunk 12+ hours into the game and I bought it less than a week ago. If you’re looking for a quality RPG, I highly recommend it. Link
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