From Pandemic Boom to Quiet Decline: Twitch’s Growth Was a Mirage

Recently, streamer Kai Cenat generated $3.6 million in just 30 days of continuous streaming, shattering all subscriber records on Twitch. While this milestone is a reason to celebrate, it underscores a troubling reality for the platform.

Why it matters. Despite its big-name stars pulling in millions, Twitch remains unprofitable. Amazon, which acquired the platform for $1 billion in 2014, continues to sustain it without turning a profit.

The cracks in Twitch’s business model are becoming increasingly apparent.

The big picture. Twitch, which pioneered video game streaming, is losing its edge to competitors like YouTube and Kick. Both platforms have expanded their market share over the past year.

The platform’s pandemic-era boom in 2020, like the growth experienced by other streaming services, proved to be a temporary surge rather than a lasting shift in consumer habits. The adoption of streaming has since slowed to a more sustainable pace.

Twitch has maintained revenue growth through 2023, but the pace has decelerated sharply since the pandemic. The platform is now flirting with stagnation.

While revenues are up due to higher average spending, viewership has declined. According to TwitchTracker, the average number of live viewers has fallen, and preliminary 2024 data show a further drop compared to 2023.

The decline is even starker among active streamers—those who broadcast at least once a month. This number peaked in 2021, during the height of the pandemic, and has been steadily falling ever since.

This decline isn’t entirely negative. It could indicate consolidation as unsuccessful creators leave the platform. However, it’s also notable that some high-profile streamers have moved to competing platforms.

Between the lines. Twitch’s financial struggles stem from its infrastructure costs and its revenue-sharing model. The platform takes 50% of streamers’ earnings, but for top creators, the cut is closer to 30%–40%. Even at its peak, Twitch has operated at a loss.

Twitch’s challenges go beyond numbers. The platform has lost some of the community spirit that once defined it. “Bleeding purple,” a motto that symbolized streamer loyalty, is less relevant today as creators migrate to other platforms.

What’s changing? Amazon has kept Twitch afloat, likely due to its ability to engage young audiences that are hard to reach through traditional media. However, if Twitch fails to maintain this connection, Amazon may rethink its strategy. The current model, centered on securing exclusive deals with top streamers, is becoming unsustainable.

The success of creators like Cenat proves that streaming still holds enormous potential. But it also highlights a harsh truth: Even with millions of viewers, Twitch’s business model remains unsustainable, and its cultural relevance is waning. Time will tell whether Twitch can reverse its decline, rebuild its community, and finally turn a profit.

Image | appshunter.io (Unsplash)

Related | Amazon Paid Almost $1 Billion for Twitch. It’s Been a Bad Investment for a Decade