Amazon has revealed plans to fire 500 more Twitch employees, in a freewheeling spiral for what once seemed to be the monopolist of the live streaming business.
Twitch’s founders started off their internet livestreaming video business with Justin.tv in 2007. Twitch was conceived as a spinoff of Justin.tv, dedicated to video games and launched in 2011. It’s massive explosion and success at this time led to the company moving their entire business over to Twitch, and in the fateful day of August 25, 2014, Twitch CEO Emmett Shear announced that they had been acquired by Amazon.
Unfortunately, as reported by Bloomberg today, insiders are claiming that Twitch never became profitable for Amazon for the past nine years that they owned the streaming service.
This is a stunning admission, because it means none of the many, many issues that struck Twitch through all these years under Amazon were material to its success and failure, and it’s simply never been sustainable.
Amazon has tried to monetize Twitch in many different ways. They started with selling microtransactions for emoticons. Twitch Prime offered users extra value if they connected their Twitch accounts to their Amazon Prime subscriptions. They also signed some streamers to lucrative deals, but then they started to reverse track.
In more recent years, Twitch Prime users had to pay extra to skip ads, and Amazon changed their contracts to pay less money to their streamers.
Twitch suffered from many hacks and account compromises, and went through several outrage cycles over streaming content restrictions and moderation policies. They have acquired various assorted odds and ends of companies, such as the Curse network of game websites, and the Internet Games Database. Various other gaming companies, such as Take-Two Interactive, still have shares in them, even after the Amazon acquisition.
None of these things mentioned above seem to have changed the status of Twitch never being a sustainable business for Amazon. They have already lost many regular employees and high level management in the past few months.
Amazon’s fundamental problem is the high cost of maintaining Twitch as a service. Twitch CEO Dan Clancy admitted this fact when they explained why they had to pull out of Korea. Clancy has been trying to mend relationships with streamers since being assigned as the company’s CEO in March 2023, but right now, he hasn’t been able to stem the losses.
Gameranx wishes the employees of Twitch well, and we also hope Clancy and his team can figure out a way to get the business on track. Twitch deserves to survive not only for its own employees, but for the many streamers and ancillary businesses that rely on it to make their living.
