‘Zombie brand’: Amazon reportedly losing hope in $1 billion buy Twitch as profits slump

Amazon is reportedly having regrets about its $1 billion Twitch purchase, which went through in 2014, with internal metrics apparently now pointing to the streaming titan already well on its way to becoming a “zombie brand.”

Streaming (and therefore Twitch) is still one of the most popular forms of entertainment online, but that hype alone doesn’t guarantee the live broadcast brand turns a profit. The Wall Street Journal this week published a report revealing the biggest spenders on the website are showing less interest. Views are down and cash is trickling into Amazon’s pocket slower and slower as engagement crashes.

To some, the writing has been on the wall for a while. In January, 500 Twitch employees were laid off as a means to the end of turning a profit. Notably, this sluggish pace and a lack of growth may be a symptom of a larger issue. Amazon has had a habit of making acquisitions for growing brands such as Goodreads and Mechanical Turk. In their market, each brand is often a standard-setting leader. Being bought by a giant such as Amazon would ideally stimulate further growth, but as a small part of a big business with little margin for error, a small window of time with less-than-stellar sales can often be ruinous.

Goodreads, MTurk, and discount finder Woot are all still owned by Amazon, but they all have competitors that seem to be growing faster. With websites like Storygraph, Clickworker, and Newegg, these Amazon websites are at times overshadowed by smaller companies that are less afraid to take risks. Twitch runs the risk of becoming the same. As it inches closer to a life as a “zombie brand,” websites like Kick continue snatch up the competition. Twitch’s slowdown also highlights the website outliving its initial utility.

In the beginning, Twitch was intended as a website that focused on streaming gameplay. Now, it may be difficult to imagine the website going back as modern superstars like Kai Cenat and IShowSpeed rake in millions of viewers with non-gaming streams across Twitch and YouTube.

That’s not to suggest it should either; IRL streaming has worked wonders for the platform, bringing in plenty of traffic with a more casual tone. Ninja has acknowledged the website’s changing landscape and streamers like Pokimane, who used to focus on gaming, have changed their pace, opting for a more casual environment to build a rapport with their communities. It has become more possible to envision Twitch as the first of many like it in the way Netflix now has several competitors vying for its crown.

Netflix remains the biggest video streamer, and Twitch may stay dominant for some time, but the likelihood of that changing one day increases with time.