Twitch CEO Sees Game Tournaments Vying With Major Leagues

Twitch Interactive Inc. (AMZN), the video-game streaming site acquired last week by Amazon.com Inc., wants to bring its online tournaments, dubbed e-sports, into the major leagues.

“A huge opportunity for Twitch is taking a step up and thinking how can we really blow this e-sports thing up,” Chief Executive Officer Emmett Shear said yesterday in a Bloomberg Television interview. “There’s a potential for e-sports to be listed in that same pantheon as football and baseball in the states.”

Shear, who has overseen rapid growth at Twitch since its founding in 2011, is plotting his next steps following the company’s sale to Amazon for $970 million in cash. Video-game tournaments is a priority because it expands the audience for gaming webcasts, he said.

Twitch will also invest in content and work with hardware suppliers to integrate the service into more products, making use of Amazon’s resources, Shear said. The online retailer, with $74 billion in annual sales, has been expanding into entertainment with Amazon Prime video and its games studio.

Twitch lets video gamers create channels and broadcast play live, while the audience weighs in with commentary. The company works with partners such as ESL Gaming Network, which hosts video-game events that can draw as many as 73,000 people.

For a one-day ESL tournament at the stadium in Frankfurt, Germany, that hosted the 2006 World Cup, Twitch’s coverage peaked at 500,000 online viewers, while about 12,500 attended each day. Shear says he believes the next event will fill Madison Square Garden in New York.

Every Platform

“We help promote up-and-coming tournaments and create an amazing experience for people to come watch that, chat about it, and make it accessible on every platform -- phone, Web and TV,” Shear said in a separate telephone interview.

The entire game industry took in $93 billion in worldwide revenue last year, according to the Gartner Group. More than 60 million people have used Twitch to broadcast their play, watch or talk about games such as League of Legends and Call of Duty, according to Shear. Almost 7 million users visited Twitch each day in July, up from 4 million in June 2013, and stayed for an average of 106 minutes, the company said.

By making it easy for gamers to stream their play live and giving the stars a cut of ad revenue, the San Francisco-based company has fared well amid competition with Machinima Inc., Ustream Inc. and Google Inc. (GOOG)’s YouTube.

‘Rocket Ship’

“We severely underestimated how quickly we would be able to grow,” Shear said. “We’ve been on a real rocket ship and none of us expected that when we started.”

The expansion was partly fueled by partnerships with console makers such as Sony Corp. and Microsoft Corp. Owners of Sony’s PlayStation 4 make up about 20 percent of Twitch’s user base, while Microsoft, maker of the Xbox One, accounts for about 22 percent. Shear says he wants to work with mobile-phone and television manufacturers to offer Twitch through their products too.

“Anywhere you’re playing games, watching broadcast, we want to be there,” he said.

Access to Amazon’s Web services will also help Shear build better technology and expand into new regions, he said. Twitch in turn provides Amazon a way to grow in video games. Shear said Twitch’s access to consumer preferences can help Amazon be a better developer and retailer of games.

Gamer Destination

Shear aims to turn the site into a broader destination for video gamers with related content including documentaries and music. Twitch has taken “experimental” steps, Matthew DiPietro, the company’s head of marketing, said in an interview last week.

DJ and producer Steve Aoki started a channel on Twitch that didn’t include gameplay in its first stream. The two-hour broadcast had more than 250,000 unique viewers, according to the company. More than 80 percent of Twitch users surveyed expressed interest in watching living music on Twitch, according to the company.

Twitch has also been tinkering with documentary offerings on the site where viewers can watch a movie together. “State of Play,” a documentary about the professional e-sports community in South Korea, was broadcast on Aug. 27, and the company plans to do more, according to DiPietro.

To contact the reporter on this story: Sonali Basak in New York at sbasak7@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net Rob Golum

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