Gamers Reap Millions From Twitch-Fueled River of Record Cash

(Bloomberg) -- When pandemic-fueled lockdowns led to a boom in streaming video games, millions of people suddenly saw a clearer path to turning their favorite waste of time into a career.

Livestreaming via Twitch and YouTube, which lets gamers play in front of an audience and build a rapport with fans, has exploded this year. Advertising and promotional money is flooding into the industry like never before. And companies such as Activision Blizzard Inc. increasingly see themselves as the media giants of this era -- with gamers as the new movie stars.

In less than a decade, the playing of video games has gone from a hobby associated with lazy teenagers to a full-fledged industry that analysts estimate has reached $1 billion in revenue. That’s roughly half the payroll of all the teams in Major League Baseball.

And now the Covid-19 pandemic has given the profession an additional nudge. Though the streaming boom has begun waning with the end of lockdown orders, gamers look to ride their newfound momentum into a profitable future.

“Livestreaming has been steadily growing over the last couple of years, but the pandemic -- with its shelter-in-place mandates -- kicked the industry into a much higher gear,” said Doron Nir, chief executive officer of livestreaming-services provider StreamElements. “The era of the livestreaming influencer has arrived.”

The broader surge in gaming is reflected in the stock prices of Activision and its rivals. Activision, which now has more than 400 million users, has gained 41% this year. Electronic Arts is up 32%, while Take-Two Interactive Software Inc. has climbed 41%. Zynga Inc., which took years to bounce back after its FarmVille boom turned into a bust, is up 50% and on an acquisition spree.

Esports leagues, which pit teams of gamers against one another, have managed to keep playing through the pandemic -- even if Covid-19 has hurt in-person competitions and industry expos.

Last year, the top 10 highest earning players raked in over $120 million altogether, according to Forbes. Some of this fortune came from contest grand prizes, but like traditional professional athletes, a large sum came from endorsements and brand partnerships. Esports players are also able to earn a living through Prime Gaming, Amazon.com Inc.’s premium Twitch subscription service. Fans pay a monthly fee to access premium content on the platform, and players with a Twitch partnership retain a portion of this money.

But the growth of livestreaming has meant the most successful gamers aren’t judged as much by how many tournaments they win -- but by how well they build an audience. And that often means spending long hours honing their skills as entertainers.

Streamers spend hours a day in front of their computers playing games and broadcasting it over internet. Their audience messages them in chats, often also displayed onscreen. Successful streamers typically have an intense focus on tactics and analyze gameplay -- sharing random observations on all aspects of life as well.

Prominent streamers have hundreds of thousands of devotees, and subscriptions are a major source of revenue. Advertisements and product sponsorships -- often computers and peripherals -- also contribute to income.

Such opportunities began to proliferate when stay-at-home orders spread this year. In the first month after coronavirus was declared a pandemic by the World Health Organization, hours of Twitch streaming increased almost 50% to 1.49 billion hours watched in April, according to data compiled by StreamElements. Facebook Gaming saw an increase of 122 million hours watched in April alone.

But finding an audience still takes hard work. And with growth slowing as lockdown orders expire, the new crop of aspiring gamers won’t always have the same tailwind.

“For both streamers and pro gamers, I think the misconception is that it’s easy because we ‘just’ play video games,” said the gamer known as AnneMunition, who has over half a million followers on Twitch.

The 30-year-old from California said she once went three months without taking a day off. She specializes in first-person shooters such as Rainbow Six, but has streamed Minecraft recently.

“At one point in my streaming career, I was streaming over eight hours at a time, without taking a break for food, and working another six hours on emails, contracts, video editing and the various tasks that go into streaming beyond playing games on stream,” AnneMunition said. “I can set my own schedule and have a lot of agency over my choices. Unfortunately, that freedom also means that a workaholic like me can often have trouble balancing my work and my life.”

When Jared “PiG” Krensel was trying to make the transition into a full-time streamer of Blizzard Entertainment’s StarCraft, he would livestream 55 hours a week. Krensel created YouTube content and coached players in what added up to more than 12 hours a day, seven days a week. Now, as an established presence, he streams from 7 a.m. until lunchtime every day.

Though many popular players are represented through esports agencies, some have made the jump to Hollywood. This year several players -- including League of Legends player James “Dash” Patterson and YouTube Gaming group the Krew -- were signed to Creative Arts Agency, the same agency that has represented Beyonce and Tom Cruise.

Streamer Ninja was recently a contestant on Fox’s “The Masked Singer” and filmed a role in Ryan Reynold’s video-game film “Free Guy,” scheduled for a December release. Pokimane, a Twitch star who is represented by United Talent Agency, also has a cameo in the movie.

Networks such as ESPN also have been broadcasting more esports, especially when they were coping with a lack of traditional competitions this year. But unlike previous generations of celebrities, many gamers don’t see television as a key to stardom.

That’s not where the fans are, said James “KLRS” Carrol, a British-born esports commentator who lives in Poland.

“We don’t ever think about terrestrial TV,” he said. “Nobody in our circles even watches terrestrial TV.”

©2020 Bloomberg L.P.