Twitch to Become Amazon's 'Zombie Brand' Amid Profit Woes

Twitch is reportedly facing significant challenges as it nears a decade under Amazon's ownership. Despite being a popular streaming platform, the service has not yet achieved profitability. Concerns have been raised about Twitch potentially becoming a "zombie brand," much like other underperforming Amazon acquisitions such as Goodreads and Woot. Internal sources indicate that another round of layoffs may be imminent following a previous reduction of over 500 employees. Advertising sales and user engagement have stagnated, with high-revenue contributors spending less. This decline could result in a significant revenue loss by the end of 2025. However, Amazon remains publicly optimistic about Twitch's future potential.

Twitch's struggle for profitability stems from several factors: declining web traffic in the US, stagnant advertising sales, and reduced spending by its biggest revenue contributors. Additionally, cost-cutting measures like shutting down operations in Korea and enforcing stricter content guidelines have not managed to turn the financial tide.

Since its acquisition by Amazon in 2014, Twitch has become a central platform for gamers and content creators. Despite its widespread popularity, the platform has faced various hurdles, including controversies over content policies and shifts in leadership roles. In recent years, Twitch has also had to navigate challenges related to monetization and user retention, which continue to impact its financial performance.