Insights

Changing World: Gaming Broadcast

December 6, 2020

Although people have been cutting the cord for a few years now, they haven’t reduced their video consumption. A lot of those entertainment hours have migrated to online TV streaming services. However, a new form of video entertainment has also emerged: gaming broadcast. This form encompasses both live and recorded streams of gamers playing popular video games. The stream usually includes the gaming screen, a camera of the gamer face, sounds from both the game and the gamer and a live stream of comments from viewers. Viewership of this type of entertainment is growing very fast, particularly in the younger age cohorts (see chart).

Sources: Twitchtracker; Somar Analysis

Streamers get mostly two types of benefit from streaming their games:

  • Income as a revenue share of the proceeds generated by their streams;
  • Social status among fans of the games they excel at.

Viewers also enjoy several benefits from participating in the streams:

  • Learn tricks and techniques to ace the games they love;
  • Community and connection with other fans of the game;
  • Free or low-cost entertainment.

While the audience already tops many A-league sports broadcasts, it is still early days. There is a strong opportunity to increase the penetration both within existing and new geographies. Additionally, and perhaps more importantly, there is the opportunity to monetize these communities with other activities, like rock concerts and other online events for example. Somar is following closely the platforms getting early traction in the space. We will invest once the price is very attractive compared to our conservative assessment of the opportunity ahead.

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