Twitch's Financial Struggle Within Amazon's Empire
In a shocking reveal, Twitch, the live streaming platform owned by Amazon, has been reported to remain unprofitable despite being part of the e-commerce giant's portfolio for almost ten years. The platform, popular among gamers, has undergone a significant round of layoffs as it grapples with financial instability.
Is Twitch at Risk of Becoming a 'Zombie Brand'?
Internal sources express worries that Twitch could become a 'zombie brand,' a term used for acquisitions that are neglected due to underperformance. This speculation arises amidst concerns regarding the platform's diminishing web traffic and stagnating user growth in the United States, combined with a decrease in advertising sales.
Revenue Challenges and Layoffs
Twitch's revenue is highly dependent on its top spenders who contribute through subscriptions and donations. However, there's a noted decrease in spending from these vital sources. Projections suggest a potential loss of nearly $250 million by 2025. Earlier this year, Twitch cut over 500 jobs, with the shadow of more layoffs looming at year's end following annual reviews.
Amazon Remains Optimistic About Twitch's Future
Despite these setbacks, Amazon's spokesperson maintains a positive outlook on Twitch's potential for success. Meanwhile, the streaming service has been through a rough patch, with significant strategic changes, including the shutdown of its operations in Korea and the resignation of its CEO earlier this year.
The platform has been in hot water due to its policies on sexual content, constantly revising guidelines to manage its community standards.
Conclusion
Twitch's efforts to stabilize and grow continue as Amazon and the platform's leadership strive to find the right balance between community satisfaction and profitability. Whether they succeed remains to be seen, but for the millions who enjoy streaming and watching on Twitch, the hope is that the platform can power through the financial turbulence and come out stronger on the other side.
