Activision Blizzard, (NASDAQ:ATVI)
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3 Months : From Apr 2019 to Jul 2019
By Sarah E. Needleman
The world's biggest videogame publishers are paying popular gamers tens of thousands of dollars to play their latest releases live over the internet, hoping to break through to buyers in a crowded industry where dominant games like "Fortnite" cast a large shadow.
Electronic Arts Inc., Activision Blizzard Inc., Ubisoft Entertainment SA and Take-Two Interactive Software Inc. are among the publishers making hefty payouts for the real-time broadcasts, or live streams. The amounts vary depending on the popularity of the "streamer," and could go as high as $50,000 an hour for top celebrity gamers, according to talent and marketing agents.
Take-Two plans to pay streamers to play "Borderlands 3" when the comedic shooter game launches Sept. 13. Ubisoft, an early adopter of the live-streaming strategy, plans to use it again for the Oct. 4 release of its special-ops shooter game "Tom Clancy's Ghost Recon Breakpoint."
"Having celebrity streamers play games is an important part of the business," Strauss Zelnick, Take-Two's chief executive, said in an interview. "It is relatively new, but it has to be organic. The streamers have to believe in it."
While smaller, independent game companies have compensated streamers for years to publicize games, big publishers like Electronic Arts have mainly stuck to traditional ads. But live-streaming now has become too popular for even top-tier publishers to ignore, said John Benyamine, chief executive of Greenlit Content LLC, a marketing agency that enlists streamers on behalf of game publishers.
"If you don't have live-streaming as part of your marketing spend, you're doing it wrong," Mr. Benyamine said.
People last year spent 8.9 billion hours watching videogame content on Amazon.com Inc.'s video-streaming site Twitch, up from 6.3 billion hours in 2017, according to industry tracker Newzoo BV.
Big-budget videogame launches have become major affairs in the $130 billion industry, akin to the opening weekend of a star-studded Hollywood movie. First-week sales are closely watched, and game companies are looking for ways to stand out -- especially as players sink ever more of their time and money into a handful of constantly updated games that don't really ever end.
The exploding popularity of live-streaming and professional gamers such as Tyler "Ninja" Blevins gives game companies another marketing lever to pull. Live streams show the pros playing and commenting on games while reacting to text messages posted by viewers in real time. The paid streams are typically labeled as sponsored.
The tactic gained attention when Electronic Arts used it to promote "Apex Legends," a download-only game in the style of "Fortnite" that it launched in February with no advance promotion. The game, played by more than a dozen paid streamers, amassed more than a million downloads its first day and more than 50 million within its first month.
Ninja was among the streamers paid to play "Apex Legends" during its first 24 hours out, Electronic Arts said. Electronic Arts declined to say how much it paid him and Ninja's talent team declined to comment on the arrangement.
Videogame player Karlissa Juri downloaded "Apex Legends" after seeing a streamer play it on Microsoft Corp.'s Mixer, a platform similar to Twitch. She said it doesn't bother her that some live-streamers are paid to play games, as long as the broadcasts are clearly labeled, something that wasn't always the case in the past.
"It really sold me watching him," said the 34-year-old New Yorker, who has since been playing the game daily and spent about $20 for virtual currency for spending on virtual costumes.
Electronic Arts said earlier this month that sales of virtual goods in the game helped the company beat its quarterly profit forecast.
"We have the power to convince people to buy a game they're on the fence about," said Benjamin Lupo, one of the live-streamers Electronic Arts paid to play "Apex Legends" for a few hours at its release Feb. 4. "They see us as more trustworthy than a name they don't recognize that wrote a review. They can see our faces. It's live interaction," said Mr. Lupo, who live-streams under the name DrLupo.
Coveted live-streamers, those who attract at least 15,000 viewers at once, can command between $25,000 and $35,000 an hour during a big launch, with the most popular ones earning more, according to Reed Duchscher, chief executive of Night Media Inc., a management firm that represents streamers and other online personalities.
Unlike the past, when big publishers reserved the right to edit paid game footage before it aired, a live-streaming audience injects uncertainty and gives publishers less control, Mr. Duchscher said.
Technical glitches could make a poor first impression or a live-streamer could speak off-color -- both have happened. There is no guarantee a streamer will be converted into a regular player. And audience interest in watching a game stream can tail off. Last month, people spent 24.7 million hours watching other people play "Apex Legends" on Twitch, down from 122.1 million in February, according to Newzoo.
Plus, quickly building a massive player base can backfire if the publisher isn't ready for sudden success, such as ensuring a game is bug-free, Cowen analyst Doug Creutz said. Once players lose interest, "it's hard to get them back," he said.
Professional live-streamers say being authentic is critical to attracting and retaining viewers, which is why they typically avoid deals to play games in genres they don't enjoy.
"People can tell when you're having a good time," said Elspeth Eastman, a 29-year-old live-streamer in South Bend, Ind. She said she tries not to bash a game even if she doesn't like it, though that can be challenging. "I always want to give my honest opinion," she said.
Write to Sarah E. Needleman at email@example.com
(END) Dow Jones Newswires
May 18, 2019 09:15 ET (13:15 GMT)
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