Video Streaming for Gaming Overview

Delivered March 22nd, 2018. Contributors: Sara F., Patricia R., Kihye H. and

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Video Streaming for Gaming: Part 1 Overview

StreamElements' top competitors include StreamLabs and Muxy. While ad spend and user acquisition costs are not publicly available for these companies, the online video gaming industry spent $37 billion on advertising in 2017. StreamElements uses the most extensive back-end advertising web technologies, however. In terms of overall online gaming video streaming viewers, Twitch still dominates the market with at least 200 games, nearly 10 million daily active users and 2.9 million monthly broadcasters. YouTube Live Gaming is catching up quickly, growing exponentially compared to Twitch. The number of concurrent viewers is growing at a steady pace for both platforms.
STREAMELEMENTS COMPETITORSStreamLabs and Muxy appear to be the top competitors for StreamLabs, based on industry articles offering comparison data. An article at Medium on the best tools for Twitch streaming count StreamLabs, StreamElements, Bebo, Muxy, and StreamJar among the top tools for Twitch streaming. Throughout my research, StreamLabs (formerly TwitchAlerts) was most often compared to StreamElements and appears to be considered the top choice for live streamers. Muxy came up most often after StreamLabs as a competitor of StreamElements. 
AD SPEND AND USER ACQUISITIONAfter an extensive search of company websites and industry and business news sources, I found no data regarding the ad spend or user acquisition costs of the aforementioned companies (StreamElements, StreamLabs, and Muxy). I suspect the reason for this lack of data is the fact that these companies are private and not required to publish financial data. 

To offer some insight into the advertising efforts of these companies, I searched BuiltWith, a database that aggregates data on the back-end web technologies used by a website. In terms of advertising, StreamElements uses Google Remarketing, Twitter ads, DoubleClick, Facebook Custom Audiences, and DoubleClick Bid Manager. StreamLabs uses only DoubleClick. Finally, Muxy does not use any dedicated advertising web technologies.

According to a January 2018 Forbes article, however, ad spending in the video game developer industry reached $37 billion in 2017 with a customer acquisition cost of around $15. Top developers spend 30% of their revenue on advertising.
NUMBER OF VIDEOS AND VIEWERS FOR ONLINE GAMINGTwitch enjoys 9.7 million daily active users. The website TwitchStats lists 200 games, but Twitch has over 2.9 million monthly broadcasters as of 2018. The most popular game, Fortnite, averages 4,895 channels. 

According to an industry report by StreamLabs, Twitch saw an increase from 484,243 monthly active streamers in October 2017 to 550,526 in December 2017. YouTube Live Gaming is catching up with 161,140 in October and 197,108 in December. According to a 2017 Q4 report by StreamLabs, YouTube Live Gaming saw a monthly active streamer growth of 343%. 

The number of concurrent viewers (the number viewing at the same time) on Twitch grew from 736,700 in 2017 Q3 to 788,000 in 2017 Q4, while the number grew from 281,200 to 308,000 for YouTube. 
A 2017 New Yorker article states that 100 million viewers watch their favorite gaming personalities play video games via Twitch. 

Ali Moiz, CEO of Streamlabs, has stated that the live streaming industry is extremely healthy with over 600 million monthly active users, 86% of which come through streamers rather than esports. Live streaming is a $3 billion industry that he expects to double within the next two or three years.
CONCLUSIONIn conclusion, the top competitors for StreamElements include StreamLabs and Muxy. Ad spend and user acquisition costs are not available for these companies, but in 2017, the online video gaming industry spent $37 billion on advertising. Twitch dominates the online gaming video streaming market, but YouTube Live Gaming is catching up quickly in terms of viewer numbers.

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Video Streaming for Gaming Market Size and Growth

The global online gaming industry is expected to reach US$58.64 billion in 2018, and grow 6.5% annually over the next five years, reaching an estimated US$80.35 billion by 2023.

The global video streaming for gaming market reached US$4.6 billion in 2017, with a 34% annual growth. The market is expected to grow at 21% rate annually over the next five years, reaching US$11.93 billion in 2022.

METHODOLOGY & ASSUMPTIONS
Please note that the Grand View Research study looks into the gaming market, both online and offline — the preview does not break down its information. A research report reproduced by Developer Tech found that as of 2017 53% of gamers played online at least once a week — this figure has been used to calculate the percentage of the gaming market that corresponds to online gaming. 

Please note that video streaming is often talked about as Gaming Video Content (GVC).

These figures and estimates are all for the global market.

MARKET SIZE & GROWTH RATE FOR GLOBAL ONLINE GAMING INDUSTRY
According to Grand View Research, the global gaming market will be worth US$171.96 billion by 2025, after experiencing a CAGR of 6.5% between 2018 and 2025. Using these figures, we can calculate the following market sizes for each year: 

2024: 171.96 / 1.065 = US$161.46 billion
2023: 161.46 / 1.065 = US$151.61 billion
2022: 151.61 / 1.065 = US$142.35 billion
2021: 142.35 / 1.065 = US$133.66 billion
2020: 133.66 / 1.065 = US$125.51 billion
2019: 125.51 / 1.065 = US$117.85 billion
2018: 117.85 / 1.065 = US$110.65 billion

This means that for 2018, the expected market size for the global gaming industry is US$110.65 billion. Given that 53% of gamers play online, we can estimate that the global market for online gaming will reach US$58.64 billion.

Similarly, assuming that the percentage stays the same, the market in five years (2023) for online gaming will reach an estimated US$80.35 billion.

MARKET SIZE & GROWTH RATE FOR GLOBAL GAMING VIDEO STREAMING INDUSTRY
According to numbers by SuperData Research reproduced by Investment Bank and Statista, revenue in the GVC market reached US$4.6 billion in 2017 coming from different segments, including advertising, donations (also called "tips"), sponsorships and subscriptions.

This is a fast growing market, which saw 34% annual growth in 2017 and is expected to grow at 21% rate through 2022. Using these figures, we can calculate the following market sizes for each year: 

2018: 4.6 x 0.21 = US$5.56 billion
2019: 5.56 x 0.21 = US$6.73 billion
2020: 6.73 x 0.21 = US$8.14 billion
2021: 8.14 x 0.21 = US$9.86 billion
2022: 9.81 x 0.21 = US$11.93 billion

Therefore, by 2022, the market will have achieved an estimated US$11.93 billion.

CONCLUSION
To wrap up, the global online gaming industry is expected to reach US$58.64 billion in 2018, and grow 6.5% annually over the next five years, to an estimated US$80.35 billion by 2023. On the other hand, the global video streaming for gaming market reached US$4.6 billion in 2017, and is expected to grow at 21% rate annually over the next five years, reaching US$11.93 billion in 2022.

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Video Streaming for Gaming Competitive Landscape.

StreamLabs, StreamElements, and Muxy all offer services to enhance the streaming experience.  StreamLabs seems to have the most far-reaching access to a wide variety of top streamers, while Muxy seems to concentrate on business opportunities in the industry and StreamElements offers the most customizable  interfaces.

The attached spreadsheet provides an overview of each company as well as an analysis of competitive advantages and challenges. 
Notes on Revenue and MetricsAs exact Revenues for these companies are not available in the public domain, data points like tipping volume, seed A funding were used to give an idea of the operational size of the companies.

To better frame company reach among streamers and platforms, I have compiled the following information:

 Increases in 2017 monthly active streamers across platforms:
YouTube= 373%
Twitch: 197%
Q4 Facebook: 62%
Q4 Mixer: 58%

 Periscope showed a 48% increase in concurrent viewership.

StreamLab's Q4 Report predicts a strong increase in mobile streaming, giving viewers new access into streamers' non-gaming lives.

To better frame streamer revenue that has a counterpart impact on streaming service companies, I have compiled the following information:

In 2017, tipping volume experienced a 25% growth.

StreamLabs found that in Q1 2017, new users averaged tips of $22.91, while long-time viewers from over 24 months ago averaged a spend of $81.10, resulting in a 4X increase and marking a trend towards more money spent over time.

Over various categories, the number of channels making more money increased at varying rates from 65% to 90%.
Summary StreamElements is an all-in-one, 100% cloud-based platform that provides streamers with a variety of tools to engage their audience, manage their revenue, receive feedback reports, and customize their stream.  While StreamElements and StreamLabs seem to offer many of the same features, StreamElements has far more design customization options for each of its services.  Streamers can design their tipping pages and customize stream overlays, alerts, stream stores, and stream pages.  

 StreamLabs is a tech startup based in San Francisco that builds tools and software for streamers to engage with viewers, monetize their broadcasts, and grow their channels. The company claims to be the number one free streaming tool and that it's been used by the largest Twitch and YouTube streamers since 2014.  One of StreamLabs' biggest advantages is their multi-platform accessibility.  Streamers can connect their Twitch, YouTube, Mixer, Facebook, Periscope, or Picarto accounts with StreamLabs, but can connect only to Twitch or YouTube for StreamElements, and only with Twitch for Muxy.  

 Muxy is based in Austin, Texas and started out by developing Twitch tools that have since become staples in the industry (no fee tips, Cheer Cup, etc.)  Currently, they highlight their services for E-sports and brands for ad and impression analytics.  The company also has a strong focus on building interactive Twitch extensions that alter the viewing experience.  Muxy seems to have solid relationships with legitimate businesses as it has EA, XBOX, and Netflix as clients, as well as a recent partnership with the NBA to livestream their games.
ConclusionA full summary of each company has been provided in the attached spreadsheet, along with a company overview and analysis of competitive advantages. 