Growing number of online gamers and streamers globally presents significant prospects for the technology giants like Amazon AMZN, Microsoft MSFT, Alphabet GOOGL and Facebook FB.
In fact, the opportunities are alluring enough to entice these companies to foray and expand presence in the game streaming space.
Per a report from Kenneth Research, the global live game streaming space is anticipated to witness a CAGR of 19% between 2019 and 2025.
We note that Amazon’s Twitch, Microsoft’s Mixer, Facebook Gaming and Alphabet’s YouTube Live are some notable live streaming platforms dedicated to gaming. Notably, Twitch is the most popular one among these. However, growing initiatives by the other three are only intensifying competition.
Is Twitch’s Weakening Momentum a Concern for Amazon?
According to Streamlabs data, Twitch’s total hours watched declined 9.8% sequentially to 2.3 billion in fourth-quarter 2019. Further, the average concurrent viewers on Twitch were around 1.05 million in the same quarter, down 9.4% from the previous quarter.
Additionally, number of unique channels plunged 33% since first-quarter 2019. Notably, Twitch had the highest number of these channels in first-quarter 2019.
This downfall can be attributed to rising competitive pressure from Mixer and YouTube Live. Moreover, Twitch has lost a number of streamers to these platforms.
Notably, the famous streamer, Richard Tyler Blevins, popularly known as Ninja decided to leave Twitch and inked a deal with Microsoft to stream on Mixer last year. Further, Michael Grzesiek who is best known as Shroud joined Mixer and left Twitch late last year.
Additionally, Jack “CouRage” Dunlop and Jeremy “Disguised Toast” Wang also switched to YouTube Live and Facebook Gaming, respectively.
This exodus of extremely popular streamers is probably the primary reason behind Amazon’s declining Twitch viewership during the fourth quarter.
Nevertheless, Amazon maintained its dominance in 2019 in terms of total hours watched. Twitch accounted for 75.1% compared to YouTube Live and Mixer’s 22.1% and 2.7%, respectively.
Additionally, Amazon, which carries a Zacks Rank #3 (Hold), is gearing up to announce its cloud-gaming service, which is expected to release in 2020. Moreover, the service will come integrated with Twitch, which offers video game streaming services.
This, in turn, is likely to sustain Twitch’s dominance in the near term.
One-Year Price Performance
Microsoft, Alphabet and Facebook’s Gaming Initiatives
We note that Mixer attracted many other famous streamers in 2019 along with the abovementioned ones. Ewok and KingGothalion also joined Mixer and this, in turn, resulted in an increased viewer base.
Additionally, Microsoft unveiled a vetting system namely streamer review system, which enables removing bot accounts, hackers and trolls. This will aid the company in delivering enhanced streaming experience on Mixer.
Notably, number of unique channels rose significantly by 153.2% in fourth-quarter 2019 from the first-quarter 2019 courtesy of Mixer.
Apart from Mixer initiatives, this Zacks Rank #3 company is planning to launch its cloud-gaming platform — XCloud this year, which is currently in public beta stage.
Meanwhile, YouTube Live is also gaining traction among streamers. Recently, Alphabet has entered into deals with Rachell “Valkyrae” Hofstetter, Elliott “Muselk” Watkins and Lannan "LazarBeam" Eacott who will exclusively stream their games on YouTube Live. These gamers have over 21 million subscribers together.
Although the unique channel base of YouTube Live fell 24.6% in the fourth quarter from the first quarter, it improved 4.8% from the third quarter.
Additionally, Alphabet’s search division Google is leaving no stone unturned to bolster presence in the gaming industry on the back of its cloud-gaming platform called Stadia. which was publicly released in the late 2019.
Google recently acquired Typhoon Studios, a video game developer startup based in Montreal, Canada. This buyout is likely to enhance Google’s gaming skills. The startup has a dedicated team comprised of individuals carrying gaming expertise, which will be integrated into Stadia Games and Entertainment.
Notably, Alphabet carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Further, Facebook Gaming has also attracted streamers other than Disguised Toast. Tempo ZeRo and Corinna Kopf have also joined this platform in 2019. Further, the social media giant introduced charity live streaming tools for the Level Up gaming creators.
Additionally, this Zacks Rank #3 company announced the debut of two Pokémon games titled Pokémon Tower Battle and Pokémon Medallion Battle on Facebook Gaming.
Further, Facebook has acquired PlayGiga, a Madrid-based company that specializes in cloud gaming in a bid to ramp up its gaming initiatives. Notably, PlayGiga will be integrated into Facebook Gaming platform team.
We note that the number of live stream broadcasters on Facebook Gaming rose a whopping 400% in the fourth quarter from the first quarter.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Facebook, Inc. (FB) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research