Twitch reminds us that it “isn’t profitable”

And water has been wet this entire time.

MajorLinux - Editor-in-chief

Last week, I wrote that Amazon and Twitch were letting some people go as layoffs continue into 2024. We may now know why Twitch was cutting people. And, spoiler alert, it’s the same reason we’ve heard since it was acquired by Amazon.

Twitch CEO Dan Clancy hopped on his channel and led a Q&A with the community a few days ago. He wanted to explain his reasonings for letting go 500 people.

We’ve implied this before where we say we need to run it sustainably, but I’ll be blunt: we aren’t profitable at this point.”

Twitch CEO Dan Clancy

He states: “Amazon has been extremely supportive of Twitch and a big thing for being sustainable over time is ensuring that we don’t lose money.”

If you recall, in an internal memo to staff, Clancy stated that the company is “still meaningfully larger than it needs to be given the size of our business.”

We need to make sure Twitch is the right size so that we can be here for a very long time. It’s critical that Twitch is here not just today, not just tomorrow, but 50 years from now, 100 years from now. Our job is to run Twitch in a manner that can ensure its prosperity, it’s thriving, and it’s here for you and your communities that you’ve built, because I don’t think the other platforms are actually like Twitch at all.”

Twitch CEO Dan Clancy

I want to be clear that we still have more than enough resources. We are still a reasonably sized organisation. We’re still going to be able to service your needs. We’re still going to be able to improve the product. 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 ’24 that you’ll be very excited about.”

Twitch CEO Dan Clancy

This is just another CEO that has gone on record to say the same buzzwords. They want the company to be “sustainable” and that only comes at the expense of employees. What gets me with Twitch’s approach to this argument is that they’ve never been profitable. It’s almost like Clancy is just using what other tech CEOs are saying about their companies and applying it to Twitch.

The one thing I will say applies to Twitch like the other tech companies is that it probably did staff up too much. It wanted to be able to do everything that they ever dreamed which required people. A lot of people. However, this happened before the pandemic when Twitch wanted to take an Apple-like approach to its product. If there was a third-party product that met people’s needs, Twitch wanted to copy it and build it into its own platform. This, in turn, bloats its product, requires additional staffing, and possibly put smaller devs out of business.

However, when you do that too much, your product suffers. People will move away to try and declutter. Now, Twitch has so many things it tried to copy that nobody uses. Streamlabs and Streamelements do it better. I personally use open source tools for things that I self-host. Twitch’s main product pales in comparison to the likes of YouTube in a technical sense.

Then, there’s creator support. This includes moderation and monetization. At any given time if a specific group of people get angry, Twitch because a dangerous place for marginalized creators. With Twitch’s alleged big staff, the company is always reactionary when it comes to protecting its users. And with monetization, one thing has to give as creators are demanding to be paid what they’re worth.

Honestly, I’m wondering how much longer Twitch has left. For Clancy to say they want to be here for the next 100 years, I think they’d be lucky to make it 5.

I hope I’m wrong.

Source: Eurogamer

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By MajorLinux Editor-in-chief
Marcus Summers is a Linux system administrator by trade. He has been working with Linux for nearly 15 years and has become a fan of open source ideals. He self identifies as a socialist and believes that the world's information should be free for all.

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