Yesterday Amazon announced that it is buying video game streaming site Twitch for $970 million. I argued that for the foreseeable future, it seemed like Amazon’s efforts in the gaming space line up well with Twitch’s goals and that Amazon has plenty of opportunities to turn the site into a money-maker going forward.
While I think that Twitch is probably going to be a win for Amazon, justifying the fact that it had to spend one-fifth of its cash to buy the service, there are a few threats on the horizon in the streaming space that the company will have to watch out for.
Beyond direct competitors like YouTube, Ustream and Hitbox, the emergence of virtual reality over the next few years offers game developers an opening to take some of that streaming time back from Twitch by providing game spectators a far more immersive view of games than is available today.
Twitch streams are general either direct from the view of someone playing a game, or someone watching via a game’s spectator mode so that they can maneuver around in the game to provide commentary on different things that are going on. Those are two great options for the biggest draws for using Twitch: to see if a game is worth buying; see fun commentary as a celebrity gamer plays; see competitive players compete in tournaments; and learn those professionals’ strategies.
In a virtual reality environment however, not having control over the camera when looking at content from a first-person perspective can lead to motion sickness. You could still show Twitch streams as giant movie-theater-sized projections in a virtual environment, but to show first-person gameplay of something like Chivalry: Medieval Warfare you wouldn’t want to give the viewer the same perspective as someone actually playing the game:
This drawback for Twitch is an opportunity for game developers to keep more game spectating within their own apps. Most multiplayer games offer some kind of spectator mode, either letting you watch strangers and friends as they play or simply watching your allies after you die near the end of a match. As the virtual reality gaming market matures, developers will have the chance to rebuild those features to better take advantage of the immersion possible in a virtual environment.
Instead of simply watching your Xbox Live friends play a match of Madden, you could walk around in the thick of things, seeing the action from the best vantage points. In Chivalry, you could walk behind the lines of storming soldiers as they mount their attacks on the enemy fort. VR headsets built for use with your phone will enable this kind of spectating from anywhere. As mobile phones get stronger, games built with multiplatform engines like Unreal and Unity could build native (but stripped-down) versions of games that let you jump directly into a match to spectate at any time.
Each of these uses come with new possible business models, including charging for spectatorship (which will seem less and less crazy as eSports take off), ads between matches, free mobile versions for spectating that let you pay for an in-app purchase in order to actually play, and more.
This isn’t to say that Amazon should be too worried about the prospect of developers bolstering their in-game spectating experiences. In yesterday’s Twitch Townhall Q&A about the acquisition, Twitch CEO Emmett Shear made it clear that both Twitch and Amazon aim to help their “partners” in the game industry make more money. While VR gives developers the chance to lure gamers to spend more time engaged with their games on more platforms, it seems likely that a more pressing goal is to sell more units, a task that Amazon is more than willing to help with.