Influence of Livestreaming Viewership on the Life Cycle of Entertainment Products : Evidence from Twitch and Steam

Despite the rapidly growing popularity of livestreaming among consumers and marketers in recent years, surprisingly little has been studied about livestreaming’s marketing effects in academia. In this research, we examine how livestreaming viewership influences consumption of entertainment products, namely video games, using longitudinal data from Twitch, a leading livestreaming platform, and Steam, the largest digital marketplace for video games. We present two major empirical findings: First, livestreaming viewership during the prerelease period of a new game is significantly and positively associated with the game’s initial userbase. Specifically, we find that spikes of viewership driven by major livestreamers as well as relatively low but stable viewership driven by smaller livestreamers independently contribute to the initial success of a newly released game. Second, we find evidence that increased livestreaming viewership relative to the number of players of the game (i.e., Viewer-to-User Ratio) prior to a marketing initiative (e.g., price discounts, DLCs) significantly increases the likelihood of a “revival” during the decline stage of a product life cycle, a phenomenon that is scarcely documented in the literature. Our research presents practical and broad implications for marketing managers and academics interested in livestreaming, a rich and novel medium for marketing research