• Market Crumbs

Tech Companies Are Spending Big Bucks To Attract Top Gamers

Image via ABC

We truly live in strange times. Ryan Kaji, who is all of eight years old, has earned more money in the last few years than you'll likely earn in your lifetime. Kaji, who unboxes toys and plays with them in front of his 23 million YouTube subscribers, has earned close to $60 million since 2016. 

The amount of money one can earn being an influencer, whether through YouTube, Instagram or wherever else, has been well-documented. The ease with which money is being thrown at people who have high follower or subscriber counts is truly mind-boggling.  

Market Crumbs previously wrote about the amount of money that is now pouring into video gaming. Streaming video games, in particular, is becoming a huge business. Video gaming content generated $6.5 billion in revenue last year, according to SuperData, which tracks the video game industry. 

Amazon had the foresight to buy video game-streaming site Twitch in 2014 for $1 billion, which was its largest acquisition at the time. Despite being one of the first companies to enter the video game streaming space, Twitch is now fighting with Google's YouTube, Facebook Gaming and Microsoft's Mixer for top talent. 

Some of the top video game streamers are leaving Twitch for the other tech giants. Tyler Blevins a.k.a. "Ninja," who became one of the most popular streamers on Twitch by playing Fornite, recently left to join Microsoft's Mixer. Ninja, who also has deals with Adidas and Red Bull, is reportedly being paid between $20 million and $30 million by Mixer for the multi-year deal.

Twitch, long the go-to service for video game streamers, is feeling the pressure of the increased competition. Twitch's share of hours watched in the live-streaming gaming market fell to 61% in December from 67% a year earlier. 

A variety of reasons are causing streamers to ditch Switch. As is usually the case, money is one of the main reasons. Others have complained about Twitch's community guidelines, which they feel are not fairly enforced. Corinna Kopf, who left Twitch for Facebook, claims she was temporarily banned from Twitch for being under-dressed. 

Harassment has also been a problem on the site, particularly towards the site's female streamers. One user was harassed on Twitch after announcing she'd broken up with her boyfriend. Twitch said these situations are "incredibly complex and don't have straightforward solutions," while noting they've doubled the size of their moderation team over the last year. 

Others cite Twitch's complacency. "Twitch hasn't been that aggressive in defending their position. They haven't dramatically changed their philosophy," Lee Trink, CEO of esports organization FaZe Clan, said. 

The fight over video game streamers is being compared to the streaming content wars facing the likes of Netflix, Disney and other studios. It's become such a hot market, many of these influencers now have their own agents to capitalize off of their growing popularity. 

With young gamers aged 18-25 spending an average of 3 hours and 25 minutes per week watching other people play video games, the fight over the top video game streamers is likely to only intensify. But as we've seen with Netflix, will throwing money at this type of content prove to be any different or just another way to burn cash

Leftover Crumbs

  • Supply and demand. Amidst the outbreak of coronavirus, which has now spread to more than ten countries, industrial conglomerate 3M is increasing its production of respiratory protection products as demand surges. This comes as N95 virus masks have been selling out across the United States and throughout Asia. "We’re seeing increased demand for our respiratory protection products, and we’re ramping up our production, in China and around the world, to meet that demand," Mike Roman, CEO of 3M, said. 

  • They're the first, but won't be the last. Starbucks was the first major American company to announce coronavirus will affect its sales as the country is hit with the virus. Starbucks, which operates 4,292 stores in China, has closed about half of its stores in the country. Starbucks' CEO Kevin Johnson said the company "intended to raise certain aspects of our full-year financial outlook for fiscal 2020." As China has become an increasingly important market for most companies, this is likely to be a common excuse this earnings season.

  • Financiers prefer New York over London. When it comes to the world's top financial center, New York is it according to a survey of financial services executives by consultancy firm Duff & Phelps. 56% of the survey's respondents believe New York is the epicenter of global finance compared to 34% who believe London is. The results have flipped drastically from last year, when 53% of respondents selected London, while 42% of respondents selected New York. Respondents agreed that New York and London will lose ground over the next five years, with Hong Kong, Singapore and Shanghai expected to become increasingly importance financial hubs. 

  • He should've been a banker. New York Attorney General Letitia James filed a lawsuit against Martin Shkreli in an attempt to block him from ever working in the pharmaceutical industry again. Shkreli was labeled "the most hated man in America" and "Pharma Bro" after hiking the price of an AIDS drug by more than 5,000% while he was the CEO of Turing Pharmaceuticals. "We won’t allow ‘Pharma Bros’ to manipulate the market and line their pockets at the expense of vulnerable patients and the health care system," James said. Shkreli's lawyers called the lawsuit "baseless" and were not pleased with James labeling their client "Pharma Bro." Shkreli is currently serving a seven year prison sentence for securities fraud and is set to be released in September 2023.

  • There's plenty of waste they can use. Adidas will expand its production of shoes made from plastic collected from beaches and coastal regions after selling more than 11 million pairs last year. Adidas will produce 15-20 million pairs of shoes using ocean plastic this year, still a small fraction of the more than 400 million shoes it produced last year. "It is a matter of time, it is a matter of scale, of volume and we are trying to lead that charge," James Carnes, Adidas vice president of brand strategy, said.