Twitch CEO, Dan Clancy, Confirms Twitch Is Not Yet Profitable

Twitch CEO, Dan Clancy, confirms Twitch is not yet profitable.

Twitch, the video game streaming platform acquired by Amazon a decade ago for close to $1 billion, is laying off more than 500 employees as the company tries to turn the tremendously expensive division profitable.

Twitch CEO Dan Clancy in an email to employees said that even with cost cuts and growing efficiency, the platform “is still meaningfully larger than it needs to be given the size of our business.”

“For some time now the organization has been sized based upon where we optimistically expect our business to be in 3 or more years, not where we’re at today,” Clancy wrote.

With more interest, the value of advertisements on Twitch went up, because of the increase in people watching and sometimes clicking on those ads. But as people began to return to work and leave their homes, Twitch and other industries that thrived off a captive audience saw less returns over time. According to SullyGnome, the total number of hours watched on Twitch has dropped in the past two years, from 24.3 billion in 2021, to 22.6 billion in 2022, and then down to 21.4 billion in 2023.

The gaming industry as a whole was one of the few that truly thrived during the height of the COVID-19 pandemic. When the world went on lockdown, gamers had more time to play, but also more time to spend discovering and watching content on Twitch. The increased volume of streaming and people watching those streams led to huge spikes in popularity for games like Among Us and Fall Guys, though even the latter wasn’t safe from layoffs.