Twitch CEO Dan Clancy shared that the streaming giant is losing money and not profitable after its latest round of sweeping layoffs, leaving some wondering if the platform might be dying.
Twitch is one of the biggest streaming platforms in the world with millions of viewers tuning in every day. Owned by Amazon since 2014, Twitch has been a launchpad for the likes of Tyler “Ninja” Blevins, Felix “xQc” Lengyel, and Imane “Pokimane” Anys. Other platforms have attempted to compete with Twitch by offering multi-million-dollar contracts to streamers, but Twitch has remained go-to destination for streaming.
That doesn’t mean the company is profitable though. Despite competition dying off and making aggressive moves to siphon money away from streamers, Twitch is still in the red. That’s not speculation either, as the news came directly from the CEO of the site in a Q&A stream.
Is Twitch losing money?
The CEO of Twitch confirmed that the company is losing money.
“We aren’t profitable at this point. Amazon has been extremely supportive of Twitch and a big thing for being sustainable over time is ensuring that we don’t lose money, and that’s a big part of my job because that’s going to be what makes sure we can be here for the long term,” Clancy said in a stream.
The stream came after Twitch laid off a massive portion of its staff. According to Clancy, Twitch is more heavily staffed than it needs to be, with the company previously hiring based on more optimistic projections than the reality of today. Twitch recently laid off 35% of its staff, roughly 500 employees.
Twitch has been aggressively cutting costs, increasing ads’ presence on the platform, and diverting money away from streamers over the last 18 months. This comes at a time when Amazon is divesting from the gaming industry in general.
In March 2023, Dan Clancy was installed as CEO and laid off around 400 staffers. In June, Twitch announced a major overhaul of its advertising requirements that effectively prevented streamers from showing ads directly through their broadcast. These changes were later rolled back.
Exclusive streaming contracts with Twitch are dying off for the most part and in October, it announced that it was lifting simulcast restrictions from partnered streamers. Most recently in December, Twitch announced it would be ceasing its operations in South Korea. At the time, Clancy cited the high costs of operation and network fees as the cause.
The downsizing is the latest example of both money and PR problems at Twitch. From the lack of proper moderation to the revenue split, viewers and streamers alike have vented frustration with the platform.
Is Twitch dying?
Twitch is not ceasing operations and its CEO stated that long-term sustainability is one of the company’s priorities.
“We won’t be able to do as much as we would’ve done before but I think we’re still going to see a lot happening in 2024 that you’ll be very excited about,” said Clancy on stream.
In recent years, Twitch has implemented multiple methods for streamers to capitalize on their communities. From every paid interaction in the platform, Twitch takes a significant percentage.
The company is still rolling out new features and programs, like its partnership with Nvidia to improve the quality of the streams. Whether these changes can get Twitch in the black and keep it from dying remains to be seen.