Twitch Bleeding Money, Risks Becoming a "Zombie Brand"
Twitch CEO Dan Clancy has admitted that the streaming service remains unprofitable. Despite being owned by Amazon for nearly a decade, the platform has yet to turn a profit, raising concerns among senior management about the brand's future.
A recent Wall Street Journal report reveals that executives fear Twitch is on track to becoming a "zombie brand" – an acquisition that has lost so much relevance and effectiveness within Amazon that it can barely cover its interest payments, let alone the debt itself. Examples of such brands within Amazon include Goodreads and Woot.
Adding to the concerns, Twitch employees are bracing for another potential round of layoffs. The company already laid off over 500 employees in 2024, citing the need to cut costs. In recent years, Twitch has faced several significant challenges, including a decline in US web traffic rankings and stagnant growth in advertising sales and user numbers.
Furthermore, platform subscribers have started spending less, impacting one of Twitch's primary revenue streams. However, Amazon still believes in Twitch's potential. The past few years have been turbulent for the platform, marked by events such as its withdrawal from Korea in early 2024 due to high costs and controversial decisions regarding its policies on sexually suggestive content.