From Bebo to Twitch, an Interview with Jason Hitchcock
A Carleton College graduate, Jason Hitchcock got his start in the games industry in sales at a mobile games advertiser called Aarki. He then joined the newly revamped Bebo, pivoting the platform into a Discord competitor, social network, and games streaming service. Later acquired by Twitch, this iteration of Bebo is most famous for their celebrity Fortnite tournaments that garnered millions of viewers each week. Jason and the Bebo team plan to release a book soon about their innovative product process. Now a Sr. Manager at Twitch, he heads up business and strategy for Twitch Rivals. You can find him on Twitter and LinkedIn.
Below is an edited version of our conversation with Jason
How did you break into the gaming industry?
A couple years back, I joined a company called Bebo. The whole point was that we were funded to explore a variety of interesting projects — in the end, we actually had over 7 different types of apps before we focused in on one. We weren’t gaining much traction. And that’s when we noticed Keemstar, who started the Fortnite Friday tournaments and was getting millions of people tuned into his first tournament with a only $20,000 prize pool. $20k sounds like a lot, but in terms of marketing budgets, it’s so small for that kind of ROI. We saw this as an arbitrage opportunity. For 20 grand, the whole world tuned into all the big players. So we asked, “What if we owned that?” We ended up building a tournament streaming feature into the Bebo app that was designed to self-promote our brand.
So, we began hosting Bebo tournaments. We approached the largest streamers and said “hey, we have a tournament, want to come?” Ninja, Dr Lupo, everyone, they all showed up. What ended up happening was that this tournament feature consumed the whole product. The most successful thing about the streaming app was the tournaments that we were throwing. One thing led to another and now we’re the esports team at Twitch.
As someone in the streaming space, what are your thoughts on Influencers vs. Esports athletes? Seems to us that there’s an interesting tension drawing more people to personality-based streaming rather than pure skill in a game. Not that they’re mutually exclusive, but why do you think that is?
We’re currently living in the Creator economy, and it’s creating a pyramid. At the top we have a few people who make a ton of money. Take a step down the funnel and we have an even greater number of people making solid, but less, money, and so on and so forth. For these streamers, it’s not just influencer marketing. It’s that they themselves are brands and celebrities, and it’s all a result of the inherent organization of the platform.
So the tension for many of these creators is based on a question: What should a person do to maximize value and get to the bottom of the funnel? Let’s say I’m an esports pro, should I be streaming? I like entertaining people but I’m really good at my game, so should I be competing? The idea of competition vs. influencers comes down to the incentives of the esports ecosystem and how money flows: platforms, tournament organizers, players, publishers, advertisers, etc. In each of these aspects, money flows around the ecosystem, but not always in equal parts.
Recently, esports has become huge. What ended up happening is that advertisers started to value esports and so they pumped in more money to tournaments in the form of sponsorships, which in turn led to bigger prize pools. They gave more money to teams to sponsor influencers. And so we basically saw more money injected on a side where the players now get paid more. What that ultimately means is that incentives change. Sometimes you’re making all this money from your team (Salary, sponsorships and prize pools) that it doesn’t make sense to stream. That’s an outcome of changing the flow of money, and its dictating the actions of these creators.
There’s been a ton of written about the current esports environment being a bubble. Do you think esports is in a bubble?
I disagree that we’re in a bubble. I think it’s not that similar to the Dotcom bubble. But back then, there were literally 50 million Internet users. And like, of course that was a bubble because we way over invested in all these tech companies that were IPOing for billions, with a supply of 50 million users!
Today the whole world is on the Internet. What’s different about esports compared to the Dotcom bubble is that there’s already a huge audience and there is a ton of demand to watch these games, and the viewership is there. It’s real, it’s the number two topic on Twitter. And in the next ten years esports is on track to become the number three global viewership sport behind soccer and basketball. Probably sooner than ten years. I think demand fends off bubbles.
Could there be a correction because there’s an over-investment in extremely specific parts of a particular part of esports? Absolutely. There are all these immense valuations in the industry, but what does it really mean? In the grand scheme of things, that’s where there will be a correction, but not a burst.
As someone who’s worked in the space for a while, where do you see the industry heading?
I have a few thoughts on the future of gaming:
- We’re going to see new kinds of esports entertainment that is more similar to Twitch Rivals and smaller Fortnite tournaments, which is native to either the game or the platform.
- Publishers are exploring how to use esports to promote their games, but the question is, can this be a sustainable revenue stream? I think the way Epic probably looks at Fortnite, for example, is to use the esports platform as a forcing function to create really amazing features and use cases for their flagship product, Unreal Engine. Fortnite is ultimately the world’s best commercial ever made for the Unreal Engine, which is a much deeper and more durable way to make money than a singular game.
- There will be a consolidation of esports teams. There’s going to be a whole group of alpha orgs that pick a small number of games to focus on instead of fielding teams in every single game. It’s going to be alpha orgs that have core teams, monetizing in other areas like apparel or brand.
In your line of work, people are very critical of new product updates, especially on Twitch. How do you take people’s reactions to new releases and changes?
I don’t think the vocal community on Twitter and Reddit is ever truly fair. The best way to find the current narrative is to look at the zeitgeist of Twitter conversations. It’s a great way to find fallacies about the current public narratives. But those platforms also have a segment of users who are very interested in the “meta” of the platform too: how do you game the Youtube Algorithm, the Internet, or even Twitch? I mean, there are entire jobs that revolve around gaming search engines, that’s SEO. It’s so valuable to know the meta of Twitch or the Internet. With that in mind, people love to debate and get super upset. But I bet if you talk to the people behind the decisions, like Epic, they’ll tell you the numbers are great. The graph line trends upward. You’ll see this conflict of public perception vs. reality with every platform that has user-generated content.
Where do you get inspiration to build new product features/to validate the market?
I generally look to China or mobile first countries as leading indicators of revealed desires for consumers. We’re all people. We all have very similar wants. Take subscriber-only mode, a recent Twitch feature, which Douyu, a streaming platform in China, pioneered. Big name influencers in China are making a healthy living just going about their days using subscriber-only mode by, for instance, streaming themselves eating at the dinner table. Sure, there are some cultural differences. China, for example, is really unique in that there are some values that are different from the West: your sense of self, perception of time, and feelings on how one person fits into the grand scheme of things. But then again, some things will always remain consistent across the world, and one key point we all share is that we like being validated.
I look at China and at mobile first countries: they’re running experiments that we’re just starting here. There are influencer incubators in China that have gone public by solely recruiting and training influencers. They put them through their academy, they invest in them, they give them plastic surgery, and they give them training. That’s their business model: they build products that they launch through the influencers they’ve created. And so they have their thousands of influencers that have massive followings and they are all associated with their agency. So yeah, China is doing some really interesting things in terms of diversifying their products.
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