It would be an understatement to say that the pandemic was good for Twitch. According to one report in 2021, the hours watched on the site increased 45% between 2020 and 2021. But it wasn’t just views that were on the rise.
U.S. Rep. Alexandria Ocasio-Cortez joined streamers for a game of Among Us and prominent journalists experimented with putting live shows on the platform. Twitch streamers were becoming household names. And Twitch-favorite games, like Fall Guys and Fortnite were turning into cultural juggernauts. For a brief moment, deep inside the fever dream that was COVID lockdown, it seemed like the site was poised to take over the world.
Four years later, things look much different. The company has cycled through CEOs, lost many of its top creators, closed down their operation in South Korea (the esports capital of the world), and has gone through two rounds of layoffs, most recently this month, where over one-third of its workforce was cut.
In trying to figure out where things went wrong, I spoke to Twitch employees, past and present, to find out. They painted a picture of a company that has never quite understood what its users wanted, caught in a constant cycle of trying to break into the mainstream, failing, and circling back to a core gamer demographic. A company that fumbled its biggest opportunities, alienated its top creators, and allowed itself to be outpaced by its competitors.
“It was exactly what the world needed during COVID lockdowns, but as that unique period of time passed, so did the demand for it,” a longtime employee says.
There’s a possibility this month’s layoffs could help ease the platform’s freefall, but there’s a long road through the wilderness ahead, even for a company that essentially invented the entire industry it’s now fighting to survive in. (Twitch declined to comment on the record.)
Here’s how Twitch lost the streaming wars—and what it’ll take to crawl their way back.
Twitch launched as a livestreaming site called Justin.TV in 2007. Gaming content was popular enough on the platform that its founders spun it off into a separate service called TwitchTV. And in 2014, Justin.TV, inc. renamed itself Twitch Interactive, pushing video games to the front of its business. That same year, Twitch Plays Pokémon, a crowdsourced attempt at using the site’s live chat to play a game of Pokémon, went viral, introducing millions to both Twitch and the concept of livestreaming video game content.
A few months later, Amazon acquired the site for more than $900 million and reported that 55 million unique visitors were watching billions of minutes on the platform. In the years that followed, both Twitch and esports became billion-dollar industries.
Much of the site’s rise and fall can be traced through the career of Richard Blevins, better known as “Ninja” on Twitch, who began as a Justin.TV user. After the Amazon acquisition, he started getting more attention for streaming battle royale games like PUBG: Battlegrounds and Fortnite. By 2019, Blevins was popular enough to warrant a cameo in a Super Bowl commercial. And also popular enough to attract a deal with Microsoft reportedly worth around $20 million to leave Twitch for the company’s short-lived competitor, Mixer. Suddenly, Twitch—and its creators—were worth something.
Then, in 2020, COVID-19 swept the world, sending millions into lockdown. Video platforms became one of the only safe ways to interact, whether directly inside of Zoom and FaceTime, or parasocially on sites like Twitch. And Twitch’s anarchic online gamer culture quickly spread into the mainstream, like the poggers emote and the “press F to pay respects” meme.
In October 2020, a group of high-profile users including Hasan “HasanAbi” Piker and Benjamin “DrLupo” Lupo seized on that newfound popularity and streamed a game of Among Us with Ocasio-Cortez. It had almost half a million viewers and was an acknowledgement that Twitch had finally arrived.
One of the masterminds behind the stream was Jordan Uhl, a left-wing activist and organizer, who was an early Justin.TV user and had watched closely as Twitch rose in popularity during the 2010s. By the time 2020 rolled around, he says it was the perfect messaging platform.
“It showed a lot of promise,” he says. “But I don’t think Amazon or Twitch recognized that there were some really serious flaws with the platform that created a pretty hard ceiling for most of its creators.”
A longtime employee, who requested to remain anonymous, tells me that the main issue is really user experience.
“I don’t think the leadership at a high enough level really understands what the value is in having a truly delightful user experience,” the employee says. “Or what a delightful UX actually means? Because clearly there’s never been much investment in achieving that.”
The employee lightly pushed back against the idea that Twitch had a head start thanks to the pandemic, however. Instead, they argued that it was really just long-form video content, in general. And Twitch’s competitors, like YouTube, Netflix, or TikTok, which also now offers live video tools, were smarter about making long-form video content fit around post-pandemic life.
“[Video on demand] content like YouTube and Netflix can pause and resume whenever,” they say. “Our VOD experience is so sad. Leadership has long insisted that no investment should be made there because our focus is exclusively on live content. That’s the Twitch specialty and they aren’t interested in broadening that focus.”
Twitch has spent most of last year trying to fix some of these issues, however. There’s currently a beta version out for a new “Chat & Events” feature, which streamlines many of the platform’s different confusing interfaces, as well as a newly simplified insights dashboard. And in August, the company announced a new “Discovery Feed,” which looks a lot like TikTok, but for Twitch clips.
The only problem is that it has been much easier for YouTube to emulate Twitch than it has been for Twitch to emulate YouTube. And YouTube’s investment in VOD, particularly on televisions, helped it overtake Netflix in 2022 as the biggest streaming platform on TVs, according to Nielsen. Meanwhile, watching a Twitch stream on a TV has always, as the former employee puts it, “been pretty deprioritized.”
But figuring out what the company actually does prioritize can be even more confusing. Especially because it’s not just Twitch’s leadership that is making those decisions, but also, Amazon.
One person who requested to remain anonymous, but was part of an outside studio developing content for the platform around 2020, said that they had their entire deal “vaporized” by Amazon following a bout of bad press.
“Long story short, we were green-lighted and moving forward, but then after Twitch got some bad press for their moronic moderation policies, the dark eye of Amazon turned on them,” they say.
They say that the word inside the company following the deal going south was that Twitch planned to focus on “core competencies”—in other words, gaming.
“It’s always struck me as indicative of their inability to do anything new and interesting that might keep them viable and relevant in the future,” they say.
This, in many ways, has been the central tension inside the company since the pandemic. Are they a gaming company or are they a mainstream entertainment company? And the answer to that question has only become fuzzier in the past few years.
The newfound attention on the site following the COVID lockdowns started to bring long-term issues with its user experience to the forefront. With a lot more viewers and a lot more diverse creators streaming, cultures inside of the platform began to collide.
In 2021, the hashtag #ADayOffTwitch started trending, to protest harassment of marginalized groups on the site. The harassment was largely driven by a concept called hate raids. One of the few discoverability tools that Twitch does offer is called a raid. What this means in practice is that as your stream is ending, you can “raid” someone else’s, sending your audience over to it. It’s a powerful way to spotlight other creators and is akin to a retweet for a livestream. But it’s also an easy way to dogpile someone else’s community. Twitch eventually said that they would try and update their community management tools to deal with the abuse.
By 2022, Twitch’s viewership had dipped ever so slightly, dropping from 24 billion hours to 21.5 billion hours. But by the end of that year, the already tense relationship between the platform and its biggest stars was beginning to strain.
If you’ve never used or watched Twitch before, the site doesn’t operate the way you might imagine if you’re used to a more traditional platform like, say, YouTube.
The site’s front page will show you popular livestreams happening at any given moment, along with popular categories of streams that are trending, such as “Just Chatting,” which are talk shows, and categories for particular games being played, but that’s about it.
And if you find yourself with a big audience in your live chat, it can be hard to hold on to that audience and bring them back for the next one. This is why most large streamers use the messaging app Discord as a way to corral their audiences and notify them that a big stream is starting.
“It doesn’t seem like it’s a strategy for long term, sustainable, financial health for the company,” Uhl says. “It’s exhausting in a very unique way.”
Amazon and Twitch appear to have tried to address these issues on several occasions over the years, most notably when Amazon considered buying Discord for $10 billion in 2021, but very little has materialized since 2020.
“You saw, as the economy in the world reopened, fewer people showing up, fewer people subscribing,” Uhl says. “It was just kind of a slow burn at the company.”
That slow burn finally morphed into a full on fire in March when its CEO Emmett Shear stepped down, followed by a massive layoff. “For many years I truly felt Twitch might die without my guidance and input, but I no longer feel that is true,” Shear said at the time.
In June, the site tried to launch and then quickly turned heel on a highly controversial branded content policy, which would have effectively banned the most popular forms of advertising on streams. The site’s new CEO Dan Clancy then apologized on stream for the policy and then, this fall, according to Bloomberg, embarked on a cross-country road trip to personally meet with aggrieved creators.
According to a third-party copywriter who wished to remain anonymous, but had Twitch as a client, there was a big shift internally towards the end of 2022 in terms of what Twitch wanted to project outwardly. Twitch seemingly realized they were losing out to platforms like YouTube and decided to, once again, pivot back towards their core audience.
“There was a major shift in brand guidelines so I can only extrapolate that a decision was made around then to just let the community be the big selling point (despite the fact that most of the uniting of that community was done on Discord),” they say.
The other issue was what Amazon wanted didn’t always seem to line up with what Twitch wanted—or needed. And this was particularly evident in how the company handled exclusivity.
“Amazon (as far as I know across all their brands, not just Twitch) are big on very strict non-compete clauses,” they say. “This also explains why cross-streaming has been their weird hill to die on to the point that they got overtaken by [streaming competitor] Kick.”
In June of this year, Félix Lengyel, who streams under the name xQc, signed a massive multimillion-dollar deal to stream on Kick.
Belvins, in September 2022, tore up his exclusivity contract with the platform and started simultaneously streaming to every major platform. And, a year later, at TwitchCon 2023, the site finally announced that streamers could simulcast anywhere they wanted.
And it’s hard not to look back at the decision to open up the platform as the end of a particular moment for Twitch. It would shut down in South Korea in December, sending some of the biggest personalities in esports over to YouTube.
Though, it’s interesting to note here, however, that based on concurrent viewers, Twitch’s biggest audience isn’t even really gamers anymore. The most consistently watched streams on the platform, according to the last 12 months of tracking data from third-party site Twitch Tracker, are largely Spanish-language football commentators, which seems to indicate Twitch might not even be sure who is using it anymore.
This is something the third-party copywriter saw, as well. “During my time there was never a direct Twitch Partners Lead,” they say. “Someone who could liaise/corral/mediate directly with their biggest streamers, which to me just felt like bad management.” (Twitch uses a collection of different divisions—for example, the global partnership and community marketing teams—to communicate with its more notable creators.)
In a big feature from Digiday about the decline of Twitch written back in April, before the most recent round of layoffs, the question arose of whether Twitch was “too big to fail.” And, by all accounts, it is still massively popular. In July, the site had a huge month, once again, according to TwitchTracker, which was largely thanks to the massive success of La Velada Del Año III, or Evening Of The Year 3, a Spanish-language boxing event.
But it’s less clear if Twitch will ever be as big as it could have been. Clancy went live this month following the layoffs and admitted Twitch is still not profitable yet.
During our interview, I asked Uhl where he would go if he decided to do the Among Us stream now. He paused briefly and considered it before landing on what seemed like a no-brainer.
“Discoverability is pretty good on YouTube. Recommendations are good on YouTube. I think I think that’s where I’d go,” he says.