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  • The Seville Reporters

In Focus: The Other Streaming War

Updated: Nov 16, 2019

July 2019, Tyler "Ninja" Blevins announces that he will be taking his video game streaming talents to Mixer, leaving Twitch, the streaming platform that helped Ninja create his brand. October 2019, Michael "Shroud" Grzesiek leaves Twitch to stream exclusively on Mixer. November 2019, Jack "CouRage" Dunlop leaves Twitch to stream exclusively on YouTube Gaming.

Investors may not be familiar with the names, but these are just a few of the rockstars within the video-game community, and they are major pieces in the other streaming war. A streaming war amongst video game streaming platforms is also taking place, and it's starting to heat up.

Meet The Combatants.

Like the television streaming war, the video game streaming war players are big names. Twitch is owned by Amazon (AMZN), Mixer is owned by Microsoft (MSFT), Facebook Gaming by Facebook (FB), and YouTube gaming by Alphabet/Google (GOOGL).

Twitch, started in 2011 was acquired by Amazon in 2016 for $1 billion. Google attempted to purchase Twitch, but lost out to Amazon. Beam was started in January 2016 and by August 2016 Microsoft purchased the company for an undisclosed amount and changed the name to Mixer. YouTube gaming was started in 2015, and it was originally a stand alone site and app, but YouTube decided to merge YouTube gaming with the main YouTube site in May of 2019. Facebook launched Facebook Gaming in 2018.

Currently Twitch is the video game streaming leader, it's the Netflix of the bunch. According to StreamElements Twitch receives about three-fourths of all the game-related live-streamed traffic on the Web. YouTube Gaming comes in second, followed by Facebook, and then Mixer.

Mixer's deal with Ninja and Shroud were the loudest shots fired in the streaming war. Not satisfied with its place in the video game streaming hierarchy, Microsoft opened it's checkbook and made a few bold moves to better its position among gamers.

But does the move by Microsoft make sense? Game streaming platform revenue is driven by advertising, along with monthly subscription revenue. If you're a seasoned investor you've seen a fair share of advertising-based companies struggle when ad revenue isn't enough to support the business model.

The gamers, the good ones at least, have figured out how to create wealth from the system. In the case of Ninja, it's reported that he received $50,000 per hour to play Electronics Arts' (EA) Apex Legends game online. Apex Legends is the Electronic Arts answer to Fortnite, the game that made Ninja a star among the gaming community.

So far Mixer's bet on Ninja appears to be paying off. Downloads of the Mixer app doubled after the Ninja announcement according to Sensor Tower. Mixer has also seen an increase in unique channels. The number of gaming hours streamed has tripled, and the total number of hours watched has increased since last quarter. All important metrics in video game streaming.

The game streaming industry is still in its growth stages. Video game streaming is expected to grow at a CAGR of over 19% between 2019 and 2025 according to Infoholic Research. Currently gamers age18-25 are watching three plus hours a week of streamed gaming content.

And the Winner is...

The market is there, the players are there, the technology is there and getting better, so who will win this streaming war? It's hard to tell at this stage. Twitch is the leader with over 15 million active daily users, but Mixer is coming on strong, with its 30 million active monthly users. YouTube has the most experience among the platforms in understanding the relationship between platform, content creator, and the audience; and the Google cloud gaming platform Stadia should only help YouTube in the video game streaming war. I don't expect Facebook do anything as big as Mixer did with Ninja, but I wouldn't count them out.

The build it and they will come days are over in video game streaming. Platforms are forcing the issue with the signing of creators to exclusive deals. The players in this streaming war are big companies with lots of money to spend, should they decide to spend it.

The space provides different options for different investors. Twitch is still the top platform, and Amazon is the play for investors who prefer front runners. Mixer has the most upside potential for investors who like the underdog to hero story. YouTube has the most to worry about. While I've only discussed gaming on the Twitch, Mixer, and Facebook platforms, they are used by content creators for other things outside of gaming; some content related to gaming some not. YouTube has been the place for content creators to publish their creations, but now Twitch and Mixer have audiences ready to consume well made content, which is not good for YouTube.

The other streaming war. It's heating up, and it will be interesting to see which platform reigns supreme in three to five years.


What is The Seville Report

The Seville Report is our attempt to bring world class investment research to people who feel world class investment research isn't available to them. We also want to demystify the stock market for people who wouldn't normally think of putting their money in the stock market. Our research comes quarterly via our newsletter, The Seville Report. We use the website and this blog to share thoughts and ideas about the markets and different companies.

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