Amazon: 'Fortnite' Helped Twitch Grow Its Prime Audience By 70%

Apr. 16, 2018 11:25 AM ETAmazon.com, Inc. (AMZN)6 Comments
Roman Luzgin profile picture
Roman Luzgin
2.9K Followers

Summary

  • Battle Royale games like Fortnite and PlayerUnknown's Battlegrounds have gained explosive popularity.
  • Twitch, a streaming platform owned by Amazon, sees exponential growth in audience thanks to the partnership with Epic Games' Fortnite.
  • The company seems to find a viable monetization strategy, which is why the growth of esports will be especially beneficial for Twitch.
  • Amazon's gaming business, which includes Twitch, continues to look solid and will become a valuable source of revenue.

Battle Royale games have gained significant traction, generate massive revenues for publishers

The video games industry has grown rapidly over last years, with increasing popularity in such areas as esports and gaming media content. Such games as Blizzard's (ATVI) Overwatch launched their own leagues, similar to the traditional sports industry, and the audience is huge for this kind of entertainment. For instance, during its first week in January, the Overwatch league attracted about 10 million viewers, with 425,000 concurrent Twitch viewers on an opening day.

Recently, the battle royale games, like Fortnite or Player Unknown's Battlegrounds, have become especially popular, with millions of active users playing the games every month. Hence, Fortnite has 45 million global players, with a peak of 3.4 million concurrent players, while PUBG has 33 million owners.

Why is this important? Firstly, because the games generate about $230 million in monthly sales for publishers, which shows how valuable the battle royale trend is. The main takeaway, however, is the fact that streaming services, such as Amazon's (NASDAQ:AMZN) Twitch, experience ever-increasing popularity, which makes them more valuable as sources of revenue.

For instance, a research by Newzoo demonstrates Fortnite and PUBG combined account for about 22% of viewership hours on Twitch and Youtube Gaming. It is claimed the primary reason for this success is the way how battle royale titles combine specific features of survival and shooter games, creating "endless replayability options," thus making it "fun-to-play and fun-to-watch." Fortnite seems to be especially successful in this case, as the game quickly became the most played battle royale game.

(Source: Newzoo)

As a result, more users join Twitch and subscribe to the premium service, Twitch Prime, which means the platform will generate higher ad revenue and the proceeds from the subscription service will increase. All of this creates a solid opportunity for

This article was written by

Roman Luzgin profile picture
2.9K Followers
I write about growth opportunities in different sectors related to technology, providing analyses of fundamentals that are driven by current and future trends. Senior Data Analyst by day, I am building and managing my own portfolio of tech-related securities, which to date has consistently beaten the market.

Disclosure: I am/we are long ATVI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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