George Tsemberlis, Kapitall: The ESPN of gaming secured $20m in funding, so are there investment opportunities among its partners?
Twitch.tv is a free online social gaming service allowing users to watch live or recorded video of other people playing video games from their computer or console, or to even broadcast themselves.
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Recently the site has become a standard for users to watch large eSports tournaments live around the world, covering major games such as the Riot Games’ League of Legends, Valve’s DOTA 2, and Counterstrike: GO.Twitch has proven itself to be incredibly successful – the platform had 34 million unique monthly viewers in May. That number surged up to 45 million in August after a deal with Steam to allow viewers to win prizes through watching the third International DOTA 2 Tournament on their platform. As the next generation of gaming consoles looms, game developers have taken note of the growing interest in e-sports and social gaming, and have rushed to integrate themselves with the Twitch.tv platform. Let's consider some of the gaming stocks among Twitch's partners. Click on the interactive chart below to see quarterly sales over time. Both the Microsoft (MSFT) Xbox One and Sony (SNE) PlayStation 4 consoles will feature native Twitch support allowing users to post recent gaming moments directly to Twitch with a single button. Perennial blockbuster game companies such as Electronic Arts (EA) and Activision (ATVI) have offered support for Twitch.tv in their respective Battlefield and Call of Duty franchises in the past, and will continue to do so in upcoming installments. Most shocking however was that developer Take Two (TTWO) of Grand Theft Auto fame, was one of the investors in Twitch's Series C round of funding. And considering the company’s recent acquisition of developer Rod Fergusson ( Bioshock Infinite, Gears of War) Take Two may be entering the competitive shooter market in the near future. It may seem a bit crazy that Twitch is attracting such significant attention from major developers, but some surprising numbers exist. A recently released Google (GOOG) white paper from YouTube shows that game-related content viewership is growing faster than the overall rate of viewership in the US. But perhaps even more interesting is the finding that over a product lifecycle, the amount of community-created “post launch” content (walkthroughs, reviews, gameplay) nearly equals developer-created “pre-launch” content (trailers, announcements, demos).