San Francisco-based video gaming platform Twitch has just raised another $20 million in a third round of funding, the company announced on Monday. To date, the startup, which has an enormously healthy stated draw of more than 45 million visitors per month, has raised $42 million in three rounds of funding, as the Twitch community grows.
According to Twitch, users watch live video on Twitch for 95 minutes each day. The company's recent deals with Sony and raise prospects that the number of gamer viewers will grow when Microsoft's Xbox One and Sony's PlayStation 4 consoles launch in November.
Investors in the newest round announced Monday include Take-Two Interactive, publishers of Grand Theft Auto, Thrive Capital, and WestSummit Capital.
What is Twitch? "We want to connect gamers around the world by allowing them to broadcast, watch, and chat from everywhere they play," according to the company team. The idea is to provide streams of players' sessions in real-time over the Internet, appealing to today's gamers who are eager to hold live broadcasts while playing their favorite games.
The company's everything-gaming online platform features live streaming events and tournaments, personal streams of individual players, and game-centric talk shows. "We have it all," according to the company, including "large-scale gaming competitions that pack stadiums, community marathons that raise millions of dollars for charity."
Game industry watchers recognize the impact that live streaming has had on the video game business, with a momentum that benefits both providers and users. With this technology, the market has been grown out to encompass not just players but game spectators. As a spectator event, this translates into huge audiences for professional tournaments as well.
"The trend of video game-based content as entertainment is not only here to stay, it's becoming a critical part of the holistic gaming experience," said Kevin Lin, chief operating officer at Twitch.
The Twitch team has tracked the gamer journey: "Fifteen years ago, gamers got their news from magazines. Ten years ago, they started getting their news from game news Web sites. In 2013, gamers are turning away from magazines and even traditional news Web sites in favor of video," according to Twitch.
Microsoft and Sony, meanwhile, are not blind to the trend and are building Twitch into their next-generation consoles. The company has secured partnerships with Sony and Microsoft to bring Twitch viewing and direct streaming to the Xbox One and PlayStation 4 when they launch in November.
Twitch makes money from ads and channel subscriptions, with the latter an important revenue component. Since launching in 2011, Twitch has become a video platform appealing to publishers, game developers, media companies, and individual original content creators as well as gamers.
No doubt investors are attracted to its global potential as well. While over half of viewers flocking to Twitch are from North America and Western Europe, Twitch viewers also are found in other regions such as Eastern Europe, East Asia, and South America.
Lin said funding will support the company's intent to grow an internal ad force and upgrade infrastructure, including accommodating streaming capabilities of PlayStation 4 from Sony and Xbox One from Microsoft. Both will feature Twitch broadcast and viewing functionalities.
In its Monday blog posting, the Twitch team asked: "What does this investment mean for you -- our broadcasters and viewers? It means that we can continue to work on the things you care about. It means we can continue to scale our infrastructure to deliver a high-quality video and chat experience to all corners of the globe. It means we can continue doing great things with games industry partners like Microsoft, Valve, Sony, Ubisoft, EA, Activision Blizzard, Riot, and on and on."
Monday's post from the Twitch team also noted that the company has grown very fast. "Since the summer of 2011, the Twitch audience has grown from less than 5 million unique viewers per month to more than 45 million."