Twitch Is Reportedly at Risk of Becoming a ‘Zombie Brand’ at Amazon as It Still Struggles for Profitability

Following a tumultuous year for Twitch.

Updated:

Jul 30, 2024 2:13 am

Posted:

Jul 29, 2024 10:21 pm

Following a round of layoffs earlier this year, Twitch boss Dan Clancy admitted that the streaming service has remained unprofitable. Now, as Twitch approaches ten years in Amazon’s portfolio, it’s still not profitable — and insiders have concerns about its future of the brand.

According to a report in the Wall Street Journal, insiders worry that Twitch might become a “zombie brand,” or an acqusition that’s sidelined because it’s underperforming, at Amazon. These sources pointed to other Amazon sites like Goodreads and Woot as examples of a “zombie brand.”

Employees also reportedly worry that they might face another round of layoffs later this year following an annual review. Earlier this year, the platform laid off over 500 members of its staff, citing a need for cost-cutting.

Twitch is still struggling to become profitable for Amazon.Twitch has reportedly faced a few major setbacks over the past few years, with its web traffic ranking in the United States falling and its advertising sales and number of users both ceasing to grow. Twitch’s biggest spenders, one of its strongest sources of revenue, have also reportedly spent less on subscriptions and donations, with internal projections suggesting that this trend might cost Twitch close to a quarter of a billion dollars in revenue by the end of 2025.

However, a spokeswoman for Amazon told the Wall Street Journal that the company still feels confident in Twitch’s potential.

It’s been a tumultuous few years for Twitch — earlier this year, Twitch shut down operations in Korea due to expensive costs, just months after its CEO resigned. The brand has also made a controversial string of decisions regarding its sexual content guidelines, the latest of which banned “implied nudity.”

Amelia Zollner is a freelance writer at IGN who loves all things indie and Nintendo. Outside of IGN, they’ve contributed to sites like Polygon and Rock Paper Shotgun, and they’re currently developing a game called Garage Sale. Find them on Twitter: @ameliazollner.