Amazon's Twitch Sees Growth Slowdown, Profitability Issues

Amazon.com Inc AMZN acquired live-video startup Twitch Interactive for nearly $1 billion in 2014.

According to current and former employees who are knowledgeable about its finances, Twitch remains unprofitable despite periods of significant popularity. the WSJ reports.

Documents reviewed by the Wall Street Journal indicate Twitch’s highest-paying users are spending less, and third-party data shows slowed growth in new users and engagement.

Following two rounds of layoffs in the past year, staffers worry about a potential third round after an annual operational review this fall.

Insiders express concern that Twitch could become a “zombie brand” at Amazon, similar to other sidelined projects like Goodreads and Woot.

CEO Dan Clancy admitted in January that Twitch is not profitable, shortly after laying off around 500 workers.

Recently, Twitch closed its operations in South Korea, disbanded its Safety Advisory Council, and raised subscription prices for the first time.

Internal documents reviewed by the Journal revealed that the live-streaming service generated approximately $667 million in ad revenue and $1.3 billion in commerce revenue in 2023, representing less than 0.5% of Amazon’s total revenue.

Amazon expects second-quarter net sales of $144 billion—$149 billion, below the consensus estimate of $150.1 billion.

Price Action: AMZN shares are trading higher by 0.59% at $183.59 at the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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