Image: Husein Adiz / Iadhina / Protocol
February 23, 2021
Hello! This week in Protocol Gaming, your weekly guide to the business of video games: how Chess.com helped grow a streaming community that's taking Twitch by storm, Valve pushed back against Apple in the App Store fight and Nvidia wants to save you from the chip shortage.
(Was this email forwarded to you? Subscribe here.)
The Big Story
How Chess.com helped build a streaming empire
For a brief period last week, chess surpassed League of Legends, Fortnite and Valorant to become the top gaming category on Twitch by viewers. Even a year ago, this would be hard to believe. Yet chess has taken Twitch by storm, attracting some of the biggest streamers on the platform, including xQc, Rubius, Pokimane, Ludwig and moistCr1tikal.
The meteoric rise of chess streaming has a lot to do with Chess.com, an online chess platform used by an estimated 65% to 70% of online chess players.
- "The first thing to understand is that this is many years in the making," Nick Barton, VP of business development at Chess.com, told Protocol.
- In 2018, Chess.com formed a partnership with Twitch. "The onus was on Chess.com — because of our market position within the playing sphere, the size of our playing platform and the size of our player base — to try to grow what we would call now the middle class of streamers," Barton said.
- Chess.com sponsored most of the top chess streamers at this time, even though many of them averaged only a few hundred live viewers per stream.
- Then the pandemic hit and people began looking for new activities to alleviate their lockdown boredom. Chess streaming started gaining momentum: Players wanted to tap into what Barton calls the "chess meta," basically a kind of meme or inside joke within a Twitch community.
You can trace the real boom moment back to a fortuitous streaming collaboration between Grand Master Hikaru Nakamura and xQc.
- Nakamura had become one of the biggest chess streamers on Twitch (he also happens to be one of the best chess players alive). He began streaming in July 2017, in part due to encouragement from Chess.com. In late 2018, Nakamura began streaming on a semi-regular basis and turned out to be a genuine streaming talent; his hard-hitting chess content was just as likely to garner views as his exhaustive ranking of fast-food chains or his session playing the Windows XP pinball game.
- xQc is a retired pro gamer and one of the top personalities on Twitch, where he regularly streams nine or more hours a day, bouncing between games that catch his interest.
- Nakamura offered to give xQc a chess lesson while streaming. They went over fundamental tactics in this first session, which now has over 1.4 million views on YouTube.
- Though Nakamura's channel was already gaining viewership from the chess meta, his lesson with xQc marked an inflection point. In the weeks leading up to the lesson, Nakamura's channel would attract around 2,000 live viewers; by May 2020, average live viewership had soared above 13,000. His livestreams now average over 24,000 viewers, making him one of the top global streamers.
Things have really started to pay off for Chess.com after the Nakamura-xQc stream, with its longstanding support for the chess streaming community finally coming to fruition.
- Chess.com-sponsored channels such as BotezLive (Alexandra Botez and Andrea Botez), GothamChess (Levy Rozman) and Chessbrah (Eric Hansen and Aman Hambleton) saw viewership increase significantly over the course of 2020.
- "We were able to create this roster of diverse personalities so that someone could log on and watch an untitled player that might be at the same level they are or they could watch Grandmaster Hikaru Nakamura, who now has over a million followers on Twitch, and everything in between," Barton said. "This was the core focus for us for quite a few years, and it took a very long time for it to catch on."
- Chess.com also helped facilitate collaboration between streamers, which helped build a sense of online community and sustain viewers' interest in the game. The Botez sisters faced off against a blindfolded Nakamura, Nakamura invited Rozman on his channel to help rank the greatest chess players of all time, Hansen challenged Alexandra Botez to a series of blitz games with $1,000 on the line — the cycle went on and on.
Finally, Chess.com created the PogChamps tournament, which was critical for sustaining the popularity of chess on Twitch.
- Chess.com put up $50,000 in prize money for the first PogChamps tournament in June 2020. It featured many of Twitch's top streamers, including xQc, Ludwig, moistCr1tikal and VoyBoy. Nakamura and Alexandra Botez coached the participants and later served as commentators for live matches.
- The inaugural tournament broke all sorts of viewership records, including the first chess stream to break 1 million unique views and the first time a chess video reached 150,000 concurrent viewers on Twitch.
- Many of these records have since been eclipsed by the second and third iteration of PogChamps, as well as the BlockChamps tournament (for Minecraft streamers) produced by Chess.com in collaboration with the Botez sisters.
— Hirsh Chitkara
- "[Stadia Games and Entertainment] has made great progress building a diverse and talented team and establishing a strong lineup of Stadia exclusive games." —Google Stadia's VP, Phil Harrison, in a letter to Stadia's game developers, five days before announcing that Stadia would no longer be focusing on original content.
- "Somehow, in a dispute over mobile apps, a maker of PC games that does not compete in the mobile market or sell 'apps' is being portrayed as a key figure. It's not." —After Apple subpoenaed Valve in its fight against Epic Games, saying that certain Steam data would be instrumental in defending its case, Valve rejected the demand. For its part, Epic filed a formal antitrust complaint against Apple to the European Commission.
A MESSAGE FROM INTEL AND MICROSOFT AZURE
For corporate IT managers, there are many motivations to move dynamic workloads to the cloud. It provides an irresistible trifecta of flexibility, scalability, and costs savings for those managing varying workloads. Here's how to keep your data safe while it's in the cloud.
- When everyone plays, we all win: Microsoft has created a game accessibility testing program, letting studios send in their games for in-person validation based on Microsoft's updated accessibility guidelines.
- Sony said VR is coming to the PS5. The announcement is light on details, but it sounds like a tethered headset — and it's not coming this year.
- Chinese esports provider VSPN is eyeing an IPO. The Tencent-backed startup could raise several hundred million dollars, sources told Bloomberg.
- Saudi Arabia's sovereign wealth fund is all-in on gaming: It bought more than $3 billion worth of stocks in Activision Blizzard, Electronic Arts and Take-Two Interactive in the fourth quarter as part of an ongoing diversification of its investments.
- MiHoYo's revenue doubled last year, thanks to the huge success of Genshin Impact. The company's growing fast as a result, reportedly boosting headcount by 70% last year.
- The app-less mobile game studio Artie raised $10 million from some big-name backers, including Zynga founder Mark Pincus, Shutterstock founder Jon Oringer, and Tyler and Cameron Winklevoss.
- Bungie announced a bunch of plans related to its expansion: It's more than doubling the size of its Washington headquarters, and it's opening its first international office in Amsterdam next year.
- Nvidia wants to spare you from the chip shortage: It announced a change in a new GPU that's going to reduce its cryptocurrency-mining efficiency by 50% in a bid to put off miners from buying them.
— Karyne Levy
Settle your lootbox claims with in-game currencies
Epic, like many game developers, faced a class action lawsuit about lootboxes. But to settle the claims, it's not resorting to cash: It's simply giving the players V-Bucks. Claimants can apply for actual cash as well, but still: If settling lawsuits with your own currency isn't proof of a metaverse, I don't know what is.
— Shakeel Hashim
Thanks for reading. Tell your friends and colleagues to subscribe here, and send tips, feedback and ideas to firstname.lastname@example.org and email@example.com. See you next week.