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Twitch Brings In More Revenue Than YouTube Gaming -- What About Facebook?

Founded in 2005, YouTube quickly became all the rage for on-demand content. Its positive reception led it to be acquired by Google a year later, and once YouTube was integrated with Google AdSense, loads of advertisers flocked to the emerging channel.

YouTube had and continues to have great success.

One of YouTube’s largest content segments remains the "Let's Play" format. Since 2007, content creators set up a camera on themselves, along with a microphone, overlaid onto a video game playthrough.

Viewers were attracted to the organic nature of the gameplay, exposing them to games they were interested in, the reactions of the content creators, and more. Currently, YouTube's second-largest content creator with approximately 102 million subscribers, PewDiePie, is devoted almost entirely to these “Let’s Plays.”

Also in 2007, Justin.tv launched -- a visionary project by a guy who broadcast his life live 24/7. The original idea, which quickly became overwhelming for Justin, evolved into a fully fledged live, and free to use, content hub for loads of creators. In this case, they became known as “streamers,” people who would broadcast live content.

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In the end, the convergence between YouTube's highly popular “Let’s Play” video game channels and the live attraction of Justin.tv's streamers led to the mass popularity and launch of Twitch.

What started as an offshoot of Justin.tv's gaming category quickly overtook its foundational platform. By 2013, Twitch had 43 million monthly active users (globally). In May 2014, Google preliminarily reached a deal to acquire Twitch through YouTube, but due to anti-trust issues, was vetoed.

In August 2014, Justin.tv shut down in favor of focusing on Twitch exclusively. In the same month, Amazon acquired Twitch.

In order to combat Twitch's success, YouTube launched YouTube Gaming in 2015, a separate portal for all things gaming related -- with both live streaming and on-demand video - from YouTube.

At the time, gaming content made up around 15% of YouTube's total content, and around 500 hours of content are uploaded to the site every minute, representing a sizable chunk of one vertical. In 2018, YouTube placed the separate portal back inside its original portal (from youtubegaming.com to youtube.com/gaming, for clarification), but maintained tracking of the separation of the verticals.

Now, in 2020, Twitch has finally overtaken one of its precursors. For the year of 2019, Twitch brought in more revenue than YouTube Gaming (aka, monetization of its gaming content), $1.54bn compared to $1.46bn, respectively.

Yes, Twitch runs more directly off of paid services (half of every Twitch subscriber's $5 payment goes directly to Twitch), but despite having a much smaller global market (73% of the U.S. uses YouTube, which makes up only 16% of YouTube's global audience), Twitch has managed to overtake YouTube’s gaming-related revenue.

Since YouTube is the forefather of gaming content and has a much larger global presence than Twitch, to me this signals the continued appeal and domination of live gaming as a mainstream form of entertainment.

Twitch has been, and continues to be, the hub for live gaming content -- and its revenues suggest that more and more gaming content viewers prefer the live experience to the mix of on0demand and live that YouTube brings.

People are tuning in to Twitch, but they are also willing to pay for premium live content, and time spent on Twitch vastly outweighs people's YouTube Gaming engagement.

In 2019, viewers watched close to 10 billion hours of live gaming content on Twitch, compared to only 3 billion hours of live gaming-related content viewing on YouTube. However, when you factor in YouTube's on-demand video, viewers watched 50 billion hours of gaming content viewed in 2019.

Despite the massive overall disparity between time spent on Twitch and YouTube's gaming content, Twitch still pulled in more revenue.

Whether competitive esports, professional streamers, or even traditional sports like "Thursday Night Football" that are utilizing Twitch for its live engaging live platform, Twitch's infectious formula for viewer engagement and content creation has overtaken one of the new-age digital titans, and is certain to continue to grow.

And yet, as I happily give praise to Twitch and continue to appreciate YouTube as the titan that it is, I wonder what the heck Facebook is doing in the midst of all this.

Amazon, Google, Apple, Microsoft, and Facebook are constantly brought up in the same world-domination conversations regardless of the entertainment vertical. When it comes to gaming entertainment, Amazon's got Twitch, Google's got YouTube Gaming, Microsoft's got Mixer, Apple is working on its “Apple Arcade” in the mobile arena, and Facebook's recent effort -- “Facebook Gaming” -- launched in 2018.

Despite a few exclusive streamer contracts, bringing talent over to Facebook Gaming, I'm not really sure what Facebook's long game is.

The platform doesn't seem to be uniquely appealing in any way, and the content is only unique if you look at the exclusive streamers that it is currently acquiring.

As Twitch and YouTube vie for power, Facebook seems to be, well, doing not much to keep its major seat at the table. Only time will tell.

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