YouTube has finally entered the realm of live video game streaming with the launch of its new platform—YouTube Gaming. The new channel will be totally dedicated to gaming videos, live streaming and other content around the gaming culture. As of now, the web version is available throughout the world and Google said that the mobile app will also be launched for countries other than the US and UK in the coming weeks.
Gaming has become big business in the digital space with a large number of dedicated followers for some of the premier streamers and content creators. To give an example, it is estimated that popular YouTuber PewDiePie made $7.4 million last year through his channel, which features videos of him playing video games.
But YouTube is not the only player in this segment; in fact its entry is quite late, when you consider platforms like Twitch. A 2014 report by SuperData Research estimated that Twitch took home revenues of around 43 per cent of the global online gaming market; a segment which was worth around $3.8 billion last year. Such was the impact of platforms like Twitch that Amazon bought the company in August 2014 for $1 million.
Clearly this is a big market and there are reasons why it makes sense for companies like Amazon and YouTube to invest in it. For one thing, the audience is loyal and highly engrossed in the content, for example, at the time of acquisition, Twitch had 55 million monthly unique users visitors globally. Secondly, unlike other platforms like Amazon’s own Amazon Videos, there is no production cost involved apart from payments to creators and partners for views and ad revenue share.
Another factor that would have impressed upon Google is that though Twitch earns significant revenues through subscriptions and donations, according to most analysts, its main revenue stream is still from advertising.
YouTube, with its higher reach (Gaming will incorporate 25,000 gaming channels) and years of experience in video advertising, will definitely have found this interesting. In fact, it was interested in buying out Twitch before Amazon had made its move.
There was no official communication from Google at the time of writing of this article though we had reached out to them via email. However, a report in AdWeek said that marketers can buy pre-roll and TrueView ads for YouTube Gaming, just as they would for YouTube and, says, the report, brands like NBC, Universal Pictures, Wendy’s, etc. are already aboard.
Whether advertisers see the potential of such platforms and this unique audience base also depends on how quickly YouTube users in India pick up the platform.
According to Subrat Kar, Co-founder & CEO of Vidooly, a YouTube marketing & analytics software firm, around 3,000 gaming channels on YouTube with a total subscriber count of nearly 4 million users. The US has around 7,000 gaming channels with a subscriber count of 550 million.
The gaming ecosystem in India is clearly still far from mature but recently there has been a lot of interest from brands and marketers for in-game advertising, which means that they realize the potential of this particular demographic, though platforms like YoutTube Gaming obviously cater to the moderate to heavy gamers, rather than causal gamers.
"Relatively speaking, gaming is still in its nascent stage in India. And most subscribers of Indian gaming channels are also from outside the country. Hence, YouTube Gaming is not such an attractive proposition for Indian advertisers as of now. The potential certainly is quite huge. With time, I think the Indian gaming audience will also pick up and get hooked to online game streaming," said Kar
Arpit Jain, Co-founder and CEO of GreedyGame, a company that specializes in in-game advertising, says that when it comes to game content streaming, it depends upon, as with anything else, the quality of the content. “In India, most e-sport events are at the college or, maybe, city level. There are very few pan-India events. In this regard we are quite behind other countries in Asia,” he told us.
However, he agreed that the gaming ecosystem will only grow in the future. “Currently, 70 per cent of all mobile users have at least one game downloaded on their phone, so we as a country are interested in video games,” he opined.
Alok Kejriwal, CEO and Founder of Games2Win feels YouTube Gaming has great potential in a country like India. “There is a voyeuristic pleasure that people get in watching other people play. In any city, if you have 3 players, then there will be 10 people who just watch others play. So, something like this (YouTube Gaming) is a great idea. However, it remains to be seen how Google brings in synergies with the product or it just becomes a Twitch clone,” he said.