Gaming

Video content for gamers to generate $3.8 billion in 2015

Competitors play Call of Duty Advanced Warfare during the ESWC (Electronic Sports World Cup) on May 2, 2015 in Paris.
Alain Jocard | AFP | Getty Images

Who says it doesn't pay to play video games?

Gamers-turned-content creators are raking it in as demand for online video focused on gaming grows.

That market is now worth $3.8 billion, according to a new report by digital gaming analysis firm SuperData Research. Much of that money is being spent on websites where gamers watch other gamers play.

Video game enthusiasts have always watched one another's play, but the combination of cheap production tools and the rise of sites like YouTube and livestreaming platforms like Twitch have turned this aspect of gaming culture into a multibillion dollar cottage industry.

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Joost van Dreunen, CEO of SuperData Research, said gamers are taking ownership of the medium much the same way music lovers used at-home editing software to blend old songs into new mashups.

"This is part of a much larger trend of people changing their relationships with media and media consumption," he told CNBC.

SuperData estimates the audience for gaming-focused video content will grow 26 percent to 486 million this year. By 2017, it sees viewership growing to 790 million people.

Professionally produced game trailers still get the most clicks, but more than half of the nearly 900 American viewers surveyed by SuperData Research also watch so-called "walkthroughs"—recordings of gameplay in which players walk audiences through levels.

About a third of those viewers said they stream live gameplay or watch "Let's Play" videos, a type of walkthrough with colorful commentary unique to the creator.

While some fortunate gamers earn hundreds or thousands of dollars per month, other breakout stars have gone stratospheric. Felix Kjellberg, a Swedish gamer who goes by the handle PewDiePie, earned $4 million last year and has garnered 9.1 billion views from his roughly 2,300 videos.

More than three-quarters of earnings for content creators and providers—$2.9 million—came from advertising and sponsorship deals. Donations from fans drummed up $638 million and paid subscriptions chipped in $252 million.

This ecosystem has created a new type of marketing that is remarkably potent, and is also beyond publishers' control to a large extent, said van Dreunen. An endorsement from gamers comes with a level of authenticity a public relations company can't buy, but game companies cannot guarantee that message will be family-friendly, he said.

"It's basically the Wild Wild West. You can have anybody commenting on your game," van Dreunen said.

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SuperData also sees a battle brewing between Google, which launched a specialty streaming and on-demand video app and website called YouTube Gaming last month, and Amazon.com, whichpurchased Twitch last year for $970 million.

YouTube dwarfs Twitch in terms of viewership, boasting 364 billion gaming content views. But Twitch has the biggest slice of the revenue; it controls 43 percent of the market on a dollar basis compared with YouTube's 36 percent share.

The reason is simple: Twitch is home to hardcore gamers, the medium's most dependable viewers and those most willing to shell out real world money to support their digital idols.