Decryption Twitch: Why is a game live site worth 1 billion knives?

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Recent media reports say Google is planning to buy a video-game live website Twitch at a price of 1 billion dollars. The site, founded in 2011, has become the world's largest gaming site and community, with a monthly active user capacity of up to 45 million, after just 3 years of development.

So what kind of company is Twitch? Why is it worth as much as $1 billion trillion? American news website BuzzFeed recently issued a post on the birth and growth of Twitch, the following is the main content of the article.

The birthplace of Twitch

The birth of Twitch, a popular game Live website, may go back to several informal meetings in the fall of 2010, including talks with Giddien Yu (Gideon Yu).

Mr Yu, the former CFO of YouTube, has played a key role in the Google deal to buy the video site for 1.65 billion dollars. Mr. Yu came to the office of Justin.tv (Twitch's parent company) in 2010, when Justin.tv had just won 80 million of billions of dollars in venture capital, and the company was making a profit from a live video site to the transition to a video-streaming website.

Mr. Yu's visit was extremely important for the company's future, according to Michael Seibel, co-founder of Justin.tv, Michael Sebers.

Then he said to us, the idea is that you've accomplished something, you've made some money, but you haven't really had a real impact, so now you can get a free ride and stop working like a start-up, or try to make a career, "Sebel recalls.

In addition, Justin Kan, another co-founder of Justin.tv, also met with dour Media's Matt Sanchez (Matt Sanchez), who persuaded Kan to launch new research projects within the company. Contact with Sanchez and Mr. Yu prompted Justin.tv to split the company's two products separately, which are game live sites twitch and video sharing applications Socialcam.

It also marks the beginning of Justin.tv's co-founder, Emite Charles Emmett Shea, from an engineer to a manager who may not have thought Twitch would eventually grow into one of the world's most valuable video streaming companies, but now it has become a reality, Google has been bidding for 1 billion dollars last week to buy Twitch.

The Shire and the Kan

The Shire and Kan play small is a good friend, two people from childhood in mathematics and magic show extraordinary talent. Although they were not alumni in high school, they were admitted to Yale University, and they joined together to develop an application--kiko similar to Google's calendar when they graduated, the first new company to be founded after the two men cooperated.

In the course of the founding of the Kiko, the Shire did not reveal his leadership skills, when he was a professional engineer, in order to achieve a function of the software to the all-night programming. According to the popular theory of Silicon Valley, the Shire of the year was a "co-founder of Technology", and it was usually only with people who were good at product design and marketing that they could make a grade. Luckily, they eventually sold Kiko at 250,000 dollars on ebay, which also confirmed their confidence to continue their business.

"By the time I graduated, I realized that I wanted to start an internet company," said the Shire, "when I first went to college, I thought I was going to do research in the future, but then I realised my interest was in doing more engineering stuff." ”

Then the shire and Kan found the founder of the Silicon Valley's top incubator Y Combinator, Paul Graham, who introduced a service that printed the content of the Web page into a paper book, and Graham was not interested in it, "Do you have any other ideas?" He asked, and then Kan introduced him to the idea of living video sites, which made Graham's spirit spirits, "This is a great idea, and I am willing to provide financial support." Then the shire and Kan got a 50,000-dollar cheque and a second chance to work with Y Combinator (the first time Kiko).

The technical strength of the Shire

The Shire's expertise in engineering was revealed in the early days of Justin.tv in 2007, at the time, Amazon offered a paid service to the company, allowing them to store streaming video and some bandwidth-demanding data on a remote server, Justin.tv is also one of the clients of the service, but Amazon later asked them to transfer the site traffic time limit Make their own bandwidth usage, because they find that Justin.tv allows anyone to live streaming video, which will undoubtedly put a huge strain on Amazon's servers.

While this is temporary, it also prompts Justin.tv to start buying its own servers and infrastructure to handle these video streaming media. Currently, the Justin.tv operates 15 data centers, with 55 million independent visitors per month, and an average of 106 minutes of video streaming per visitor per day. It now seems to be a necessary condition for the birth of Twitch.

"The practice of providing users with a truly high-quality video by building a network of peering around the world is a bit unconventional for justin.tv at the time," receptacle venture capital (Bessemer Venture Isen Kuzwil, one of Twitch's investors, said it would benefit from the Shire's awareness of the importance of service quality in the early days of the company's inception.

At the time, several people in the Shire and the company, including Kevin Lin, who later became chief operating officer of Twitch, had noticed that the live broadcast played a prominent part in the growth of Justin.tv's business, because they were the more senior gamers themselves (the Shire was the Warcraft II and "StarCraft" fans), and also saw the game live in the future of the Internet's great potential for development.

At the same time, Kan and Sebel are noticing another trend--smartphones are becoming popular, and the way people interact with the web is changing as mobile phones emerge. After talks with Sanchez and Mr. Yu in 2010, Justin.tv's team decided to focus the company's future development on the game's Live service (predecessor of Twitch) and social video application Socialcam.

The path of Twitch growth

At that time, the company gave these two projects six months, then the development of a better project will become Justin.tv future. Surprisingly, these two projects have done quite well, then the company decided to Socialcam from the Justin.tv, by Sebel and several engineers jointly responsible. As for the game broadcast business, Justin.tv in 2011 E3 Game exhibition officially released the game Live platform Twitch.

Looking at Twitch's architecture, it's clear that it's from the Shire, for example, that the two main reasons for Twitch to be really popular with the players are their high demand for video quality and the fact that the entire service is built around the need for live video. Twitch's pursuit of these details made it a player's praise and affirmation in the early stages of development, taking the professional player Cosmo White (Cosmo Wright) as an example, when he played his own "The Legend of Zelda: The Flute of Time" (the Legend of Zelda:ocarina of When the Customs clearance video (18 minutes 10 seconds to break the world record) uploaded to the Twitch after the world famous.

Then, Twitch's users began to soar, and a year after the official release, Twitch had attracted 20 million viewers, and a partner program had been launched to get a share of the bonus from their live shows. Twitch's audiences are mostly game-heavy players, and these players are undoubtedly a very attractive source of advertising, which has also won great opportunities for Twitch and podcasts, and Twitch has evolved from an initial concept into a tool for many professional players to make a living.

"I'm glad to have a platform like Justin.tv and Twitch in my time of life, and their presence is an important reason for my success," says White, "and it's very rare for a player to be a twitch podcast." ”

Of course, the development of the Shire and Twitch is not smooth sailing. This week, for example, Twitch announced that it would work with audible magic to scan the videos uploaded by users to include infringing audio content. Once the infringing audio is found, the infringing part will be silenced. This news, immediately in the Twitch community caused a huge response, some podcasts will undoubtedly face new difficulties. But in order to ensure the smooth and healthy growth of Twitch in the future, the Shire has to make such a decision.

At first, the Shire's style of management was biased towards pro-Pro, which was directly linked to the origins of the engineers, but according to Kan, as Twitch and the team grew, the Shire began to show a better management talent than any other founder.

"The Shire is a very dramatic figure, and it's hard to imagine how an introverted engineer has turned into a leader who can lead a team of more than 100 people to achieve a common goal," said Kyle Vogt, another co-founder of Justin.tv.

The enthusiasm for the game and the focus on the Twitch community and podcasts have made the Shire a very quick partnership, after all, for traditional game developers, Twitch is a brand new, huge platform that gathers a large number of gamers. About a year after the release, "Warcraft" and "Call of Duty" developers see Blizzard has begun to promote their games through the Twitch, such as the recent twitch.tv on the official game channel on the regular access to Blizzard's card games, "Stone legend" in each major update before the latest game video, According to the Blizzard CEO and co-founder Maik Mo Huaimi Mike Morhaime, Twitch did bring a lot of high quality players to blizzard, because the blizzard would like to hype a similar to the "furnace legend" of the game, often need to invest in high marketing costs, But the twitch of the player's gathering place makes it all the more simple and workable.

"The Legend of the Furnace stone can be the top of the twitch in the rankings to make us feel excited," Mo Huaimi said, "Each game update video can attract 150,000 of people's onlookers, which shows that the players are very interested in our content." ”

In addition, the Shire has successfully integrated the Twitch platform into Microsoft Xbox One and Sony PlayStation 4 and other game consoles. But the smartest move he has made should be the integration of advertisers ' resources before Twitch plans to launch its own advertising business.

"Twitch first warmed up the advertisers and told them what they could get through Twitch, but Twitch didn't sell any products to them," Berchang's Kurzweil said, "Although it's not a great strategy, it's really sensible." Last year Twitch in the company set up an advertising sales team, this should be I have seen the most efficient sales team, in their efforts, some large advertisers in advance to buy a lot of twitch ads, this is the Shire's shrewd. ”

Twitch has grown to be one of the world's largest gaming video streaming platforms, and Twitch.tv has become the main live channel for the popular game My World (Minecraft). In addition, Twitch.tv has enhanced the video management capabilities of podcasts, helping their sub channels to play video games all day to attract more viewers. It is no exaggeration to say that Twitch has become a "phenomenon" company in the gaming industry, and that is why it is worth 1 billion of dollars.

"Ultimately we are a website where people can watch videos, chat, talk about video, and so on," said the Shire modestly, "you can interpret Twitch as YouTube, but we are also a social network and media company focused on the content of the game." ”