After the global corporation Amazon bought the streaming platform Twitch in 2014, big things were planned that would give Twitch the same reach as other social media such as Instagram or YouTube. But after 10 years, Twitch still has profitability and growth issues, leading to questions about its future within Amazon’s portfolio.
In 2014, Amazon acquired Twitch for nearly $1 billion, aiming to transform the livestreaming platform into a powerhouse like YouTube or Instagram. However, ten years later, Twitch struggles with profitability and growth, raising doubts about its future within Amazon's portfolio.
Despite generating around $2 billion in annual revenue, Twitch remains unprofitable, leading to significant cost-cutting measures, including multiple rounds of layoffs. The platform's inability to sustain the pandemic-driven boom in digital activities has contributed to stagnant growth and declining user engagement.
Increased competition
Increased competition from platforms like YouTube and TikTok, which offer streamers more lucrative monetization options, has further eroded Twitch's market share. Internally, management and strategic direction issues, particularly under CEO Dan Clancy, have led to declining morale and trust among employees.
There is growing concern that Twitch might become a "zombie brand" within Amazon, receiving minimal investment and attention due to its underperformance. Internal projections suggest significant revenue shortfalls by 2025, fueling speculation about further layoffs and budget cuts.
Still hope for the future
Despite these challenges, Amazon maintains a long-term view of Twitch's potential, emphasizing its ability to attract hard-to-reach audiences. However, the immediate focus is on resizing the business to align with more conservative growth predictions.