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Twitch Falls Short of Ad Revenue Expectations; Steam Release Numbers Plateau

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TheGamingEconomy Daily Digest brings you the trending business stories in gaming. In today’s edition: Twitch falls short of ad revenue expectations; Steam release numbers plateau; and PlayStation 5 Japanese release window to mirror Western markets.

Twitch falls short of ad revenue expectations

Twitch has fallen significantly short of internal expectations for advertising revenue, according to company officials speaking to The Information. By the middle of last year, the company was projecting final ad revenue of USD$300m (£229m) for 2019, whereas Amazon executives were intending for the streaming service to realise between USD$500m (£381m) and USD$600m (£457m) from its ads business in the year, eventually pushing towards USD$1bn (£762m) in 2020-2021. The platform’s US audience is also declining, with monthly visitors falling from 22 million in 2018 to 18 million in 2019, likely to be caused in part by an exodus of popular streamers to alternative platforms, such as Mixer and YouTube Gaming.

While Twitch executives have not publicly commented on the reports at this stage, recent data published by SuperData would corroborate that the service is falling short on advertising. In its 2019 Year in Review report, the analytics firm determined that Twitch generated 23% of total gaming video content (GVC) revenue, while YouTube Gaming bought in a share of 22% of total revenue, despite having a significantly smaller audience.

Despite under-performing in terms of advertising, other sources of “commerce” revenue for Twitch, such as subscriber fees and affiliate game sales, are helping to mitigate the shortfall, with executives aiming for combined advertising and commerce revenue of USD$1bn (£762m) in 2020.

Steam release numbers plateau

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The number of new PC titles released on Steam is plateauing according to data from SteamSpy, with 8398 games published in 2019, which represents an increase of 2.2% from the 8220 titles released in 2018. In previous years, the proliferation of the number of titles released on the platform has been more substantial, with respective increases of 65% (2014-2015), 65% (2015-2016), 40% (2016-2017), and 30% (2017-2018). Factors which are likely to have contributed to the deceleration include an increase in rival storefronts such as the Epic Game Store, changes to Steam’s release policy, and the continued success of previously released titles which in turn is giving rise to the ‘games-as-a-service’ model.

An important caveat to note is that since Valve made game library data private in 2018 as a result of data privacy concerns, the numbers released by SteamSpy are estimations, plus developers can alter release dates post-publication.

PlayStation 5 Japanese release window to mirror Western markets

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The release window for the PlayStation 5 in Japan is expected to more closely mirror that of Western markets, following comments from Sony Interactive Entertainment (SIE) president Jim Ryan in an interview with Business Insider Japan. The current PlayStation 4 console has performed relatively poorly in Sony’s home market, which has been blamed in part for a delayed launch window, having launched in Japan more than three months later than in North America.

Ryan stated, “I cannot comment on the timing of release or launch markets. However, the three-month delay for the release of PlayStation 4 in Japan was a decision that I was deeply involved in. There was reasonable ground for that decision, but these days I do not think that was a good idea. It was a decision made after much debate, but there may have been other options.”