In video games, spectating is new form of advertising
The rise of online audiences watching video gamers stream themselves playing isn't simply a new form of entertainment seen by millions. It's also driving video game sales, and drawing the attention of federal regulators.
A study released Wednesday by live streaming company Twitch attributed 25 percent of sales of releases like the fighting simulator Punch Club and the kill-or-be-killed multiplayer game The Culling to those games being played on Twitch. The study found that viewers were more likely to buy a game within 24 hours of watching a stream of the game in action.
"There's a clear relationship between viewing and purchasing behavior," said Twitch data scientist Danny Hernandez, who studied users who connected their Twitch account to online game retailer Steam for increased social interaction.
It's not only the most popular online players who influence sales. Hernandez found that mid-tier Twitch streamers - those with audiences between 33 and 3,333 concurrent viewers - are responsible for 46 percent of game sales.
While the majority of online gamers freely stream themselves playing, many of the most popular streamers with millions of followers are now regularly paid or sponsored by game publishers, a practice that was recently investigated by the Federal Trade Commission.
The FTC said on Monday that Warner Bros will settle charges it deceived consumers by not properly disclosing it paid influencers with big followings on YouTube to promote the action game Middle-earth: Shadow of Mordor in 2014.
The government said Warner Bros. hired YouTubers such as Felix "PewDiePie" Kjellberg, who boasts over 46 million subscribers, through an advertising agency and instructed them to publish the sponsorship disclosure where consumers couldn't easily spot it.
"If I did something wrong, I should be paying the consequences," PewDiePie said in a video posted Wednesday on YouTube. "In this case, I don't think I did anything wrong."
As many outside the gaming realm continue to wonder why anyone would want to watch someone else play a video game online, the audience for such content continues to swell to staggering heights. Twitch's daily active users have grown this year from 8.9 to 9.6 million.
The interactive industry tracker Newzoo said in a February report that over 470 million gamers watch online gaming content on a regular basis and that number is expected to surpass 500 million viewers in 2016.
"The convergence of video and games means game companies can now entertain people across all screens at every moment of the day," said Peter Warman, CEO of Newzoo. "I think game companies are realizing this opens up new revenue possibilities."
