With YouTube recently unveiling its gaming plans, we have a clear battle over one of the hottest categories for online video.
Gaming-related videos on the Internet is a $3.8 billion market annually, according to intelligence firm SuperData Research. That is thanks to the 468 million people who watch, subscribe, and make donations on sites like Twitch and YouTube. And this sector is only going to grow over the next few years as more people around the world get into esports, speedruns, and more. So while people marvel at the fact that PewDiePie made millions of dollars last year, YouTube and Twitch are going to battle over the real money.
And right now, Twitch is winning, according to SuperData chief executive Joost van Dreunen.
“Gaming video content earns more on Amazon-owned Twitch than YouTube,” said van Dreunen. “That’s thanks to revenue from subscriptions and donations.”
With that headstart, Twitch’s lead may only grow as the market continues to balloon. And SuperData doesn’t expect it to cease growing at a rapid rate any time soon. That’s because the online gaming-video audience was only 86 million people in 2013 before growing to 468 million this year. The analysts predict that number will reach 790 million by 2017.
With an audience that size, which is all engaged and wanting content related to games, the people who make and release games are starving for that attention. Van Dreunen notes that publisher have “recently started to leverage online video channels as a key component of their marketing efforts.”
But while publishers are using video to reach gamers to convince them to buy stuff, online gaming video content is a market itself.
“Watching videos online is second nature to the current generation of gamers,” said van Dreunen. Celebrities like PewDiePie, who earned $7.5 million last year, have proven to be important tastemakers in an industry that traditionally knows tightly controlled marketing and press efforts.”
To people like PewDiePie, gamers have already contributed more than $890 million through
paid subscriptions and donations. But most of the money still comes from sponsorships and advertisements, which is on pace to bring in $2.9 billion in the U.S. this year. That’s 77 percent of all revenue.
And those numbers revenue figures are going to get significantly larger in the near future.