Since its launch in 2011, Twitch (AMZN) has come to define a new era for those who play video games.
Kids who grew up hearing their parents say, "It's not like you can make money playing video games" now have a new answer, "In fact, I can."
While doing so in the esports world involves training and seemingly endless practice that would grind the average person to dust, Twitch offers a different way for gamers to make money simply by showing up and being themselves while streaming whatever game they're playing.
So far, that formula has continued to draw people to the platform. Today, Twitch sees an average of 31 million visitors a day. Eight million of those host live streams, making the site $2.3 billion in 2020.
While Amazon's acquisition of the site in 2014 for $1 billion certainly helped to fuel that performance, a great deal of Twitch's money comes from its regular streamers.
That's because once a streamer attracts an audience regularly enough, they unlock the ability to become a Twitch affiliate, which allows them to earn money from their streams through advertising and tips viewers can leave called "bits."
Of course, Amazon takes a cut of that — and if its newest plan becomes a reality, it's about to take even more.
What Changes is Amazon Making?
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Amazon is considering a host of options to reach profitability for Twitch, according to a new report from Bloomberg.
One of them is cutting revenue from subscriptions from Twitch's biggest streamers.
Called Twitch Partners, the program is a step above an affiliate relationship and offers a boon of advantages to the streamer, including a $250 monthly payout per 100 subscribers.
Partners also get access to exclusive emoticons, the ability to save videos of their streams for longer periods of time, and opportunities to be featured on Twitch's front page.
Twitch partners currently get to keep 70% of what they make, but if Amazon goes forward with this change, that will be reduced to 50%.
Another update the brand is considering is offering incentives for streamers to run more ads.
As it stands, streamers can choose to add one auto-play ad at the beginning of their stream, or implement more throughout the stream.
One more option is being discussed to create a new tier system for Twitch partners, although the details of the criteria were not clarified.
However, Bloomberg's source did say that Twitch could also loosen its exclusivity terms in this model, meaning Twitch partners could stream to YouTube or Facebook instead of only on Twitch.
Lastly, the sources said none of the options were in motion yet and could all be abandoned.
Twitch Users Are Not Happy
Both Twitch users and subscribers were quick to object to the plan on Twitter.
Others tagged Twitch in their replies, pointing out that the platform has already experienced major losses among its workforce and that this move would worsen the situation.
Twitch has come under fire more often in recent years, most recently in relation to a massive data breach in October 2021.
The breach also revealed how much the site's top streamers get paid, which was previously kept private.
Many of the payouts were over a million dollars.
