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Twitch warns US sub price increases “extremely likely” after international updates
(www.dexerto.com)
this post was submitted on 22 Feb 2024
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Technology
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If Amazon is sinking money into it, someone somewhere sees a path to profitability. I can't imagine why they'd invest all that money only to shut down one of the internet's largest brands.
Giant tech firms are actually /notorious/ for investing huge amounts of money into basically experimental/risky ventures, and then pulling the plug.
Google in particular... Stadia, Google Places (or whatever was the name of their attempt at out Facebooking Facebook).
MSFT has done this a bunch... even a lot of non really 'Tech' huge corporations do this as well, with increasing regularity since the Mergers and Acquisitions trend started in the 80s.
The way they are able to do this is that they have core business branches that are able to functionally internally subsidize these risky ideas, with the math on it all only making sense if the risky idea that needs to be subsidized can remain subsidized until it either turns a profit on its own, or is absolutely essential to a syngergistic business plan between other business lines under the same corporate banner.
However... as a large multi faceted business such as this faces as economic downturn?
Generally what happens is all the top management starts getting nervous and wants all of their sort of sub businesses to be more self sufficient.
Now Twitch in particular is basically a burning money pit, a black hole.
Amazon acquired because they assumed it would keep growing rapidly.
But... when you start making the average Twitch user have to pay more money, view more ads, etc, to use the site, this functionally starts a death cycle.
Making Twitch have increased responsibility for its own profitability necessarily slows down the growth. And the growth rate is required for running Twitch to make sense in the long run.
Tl:dr: Yeah, they saw a path to profitability, overall, for all of Amazon, and now that path includes more monetization for Twitch which will necessarily lower the growth number of Twitch, which makes that original overall profitability plan look more like it doesnt include Twitch than including Twitch.