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Economics of YouTube gaming
May 2, 2014 9:00 AM   Subscribe

I've recently become very interested in people who record themselves playing video games and then edit and post the videos to YouTube. It's clear that some people are supporting themselves this way. What are the economics of this? Where does the money come from? How much is it? How many followers are necessary to make a living this way? Etc.
posted by JohnLewis to Computers & Internet (7 answers total) 5 users marked this as a favorite
 
Quick search on reddit shows at least two related AMAs.
posted by homesickness at 9:08 AM on May 2


It's funny you ask, since I've just been looking into the "Let's Play" phenomenon. Not so much to monetize -- I'm thinking about doing it as a way to add more content to my YouTube channel (which is tangentially related to video games), and also as a comedy/conceptual/artsy type thing pretty different from how most people use it.

But in talking about it, I heard from a bunch of people who watch Let's Play videos on more obscure games in lieu of reading reviews. So in a way, it's sort of a more 21st century/tech savvy way to review a product rather than just writing words about it or telling someone about it with your face rather than the game's graphics as the visual.

As far as monetizing, keep in mind that these things function as promotional materials and free fan-generated content for video game companies and other online content-driven stuff like Machinima.
posted by Sara C. at 9:12 AM on May 2


I'm at work so I apologize if this is incomplete or a bit rambling.

JohnLewis: "Where does the money come from?"

There are two main sources:

- Game publishers. Twitch has Twitch Media Group that sells ad products. An ad product includes obvious stuff like individual ads and takeovers. But they can also be more creative— I remember a promotion where a game publisher gave broadcasters a copy of a game a week before it was released. As a publisher, it's a very high quality, direct way to engage with the community. In addition to advertising, publishers will put up tournament prize money.

- Direct $ from fans. A popular broadcaster can offer a subscription to their fans for e.g. $5/month. In exchange, fans get to support their favorite broadcaster and get subscriber-only benefits such as exclusive videos, the opportunity to play a game with the caster, emoticons, chat badges, etc. Some folks (e.g. ESL) have built a business on hosting gaming tournaments and bringing together casters, professional gamers, and fans.

JohnLewis: "How much is it?"

This varies a lot. The popular casters often make enough money to do it full-time— which means thousands of dollars a month. There's a much larger percent of people that just want to make a couple bucks on the side from tips from their fans. One of my favorite channels was a Minecraft player who would use his money to fund his chili growing business on the side.

Full disclosure: I was a software developer on the revenue team at Twitch for almost two years.
posted by yaymukund at 9:57 AM on May 2


Well, on YouTube the money is coming from ads. But generally speaking, the popular gaming casters are affiliated with "networks" which handle a bunch of stuff: dealing with adsense and other ad networks, licensing rights from game publishers, etc. Since this involves IP (the game) the broadcaster doesnt own, they have to make sure the game company is OK with it (often they are since it is free advertising! But it might depend on how the game is represented).

But ultimately, the revenue for YouTube game casters is coming from the ads on YouTube.

As yaymukund explained well, twitch is a little different, since they're explicitly gaming focused. And probably some do both, although might depend on any agreements they have with distribution/marketing networks and/or Twitch/YouTube.
posted by wildcrdj at 11:28 AM on May 2


I don't know if they're necessarily getting all their views from followers who watch all their videos. I think a lot of their views are from people like me, who after spending 30 minutes swearing at THE WORST FUCKING QUEST IN THE ENTIRE HISTORY OF THE WORLD (I'm looking at you, spinning animal stones in Skyrim) finally give up and just Google the solution.

So I'm guessing that people who make short walk-through videos of frustrating areas of games probably get a LOT of views.
posted by Jacqueline at 12:04 PM on May 2


I watch a ton of LPers on YouTube, and most of the ones I watch make most, if not all, of their living this way. Some are married, with children and houses, and all the things.

As others have said, they get their money from ad revenue. However, total subscriber count is not always the most useful thing for professional YouTubers. What matters is getting people to watch their videos, subscribed or not, and the best way to do this is through what YouTube uses to measure "engagement." Engagement is primarily measured through likes and dislikes, which has an effect on how highly your video is featured in search result rankings. it doesn't actually *matter* if your video has a ton of dislikes--YouTube still counts that as engagement.

Most of the people I watch have a strong dislike of networks, primarily because they no longer provide particularly useful services due to the way that YouTube has changed some of their policies.

Some of the LPers I watch have laughed at the earnings estimates given on SocialBlade, though several of them have stated that they do make a comfortable living. One of my favorite LPers, VintageBeef, has a yearly earnings estimate that ranges from $83.8K - $698.7K. So, that's quite a range. Another of my favorites, EthosLab, has a yearly earnings estimate of $102.6K - $854.9K. Again, that's a huge range. But both low ends would be pretty comfortable. Beef had about 900,000 subs the last time I looked, and Etho is probably at about 1.5 million now.

Some YouTubers also do Patreon, which allows them to ask for subscription fees in exchange for perks, like private video content uploaded to YouTube for Patreon patrons only. Twitch is also a popular source of secondary income, and this also has a subscription model that LPers have access to.
posted by xyzzy at 4:12 AM on May 3


Full disclosure: I work for the company behind the new thing I'm about to plug.
You could also take a look at Games Republic (www.gamesrepublic.com) - the idea is that you can add to your videos a link to the game sale in the shop you set up free at Games Republic and get 15% commission from every sale, so if people decide to try the game you're showing, they can buy it while awarding the messenger.
posted by hat_eater at 8:49 AM on May 3


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