Is Twitch's Power-ups a tactical product mistake?
Twitch's latest product announcements, Power-ups, caught my eye.
Something sent my product spidey senses tingling.
Are Power-ups really something Twitch users want? How does it fit within their product strategy? Is this the most valuable thing they could work on?
I grabbed a snack and headed down the rabbit hole.
What's wrong with this feature?
Here's how Twitch define the feature:
"Power-ups are designed to provide fun and interactive ways to influence streams using Bits, all while supporting the streamers you love."
They provide examples, such as the ability for a stream viewer to use Bits (Twitch currency) to send emojis flying on the screen, visible to all viewers.
Power-ups are a way for viewers to stand out, get noticed by the streamer, and pay the creator (Bits revenue is split between Twitch and the streamer).
Here's why this feature struck me as odd.
It doesn't seem innovative
My immediate reaction was: 'This already exists'.
A quick Google search shows Twitch announced a feature called 'Cheering' in June 2016.
This is how they defined Cheering back then:
"Cheering is a new way to show support for streamers and celebrate the moments you love with the community, all right in chat. A Cheer is a chat message that uses Bits, which are evolving animated emotes that you can buy."
To pay for Cheers, Twitch released Bits as a sort of Twitch currency.
Sounds awfully similar. Did it take 8 years to add flying emojis?
It clashes with a core product experience
Here's a video recording of a Power-up in action.
In this instance, a viewer pays (using Bits) to trigger an 'On-Screen Celebration': tens of emojis of the viewer's choice fly across the stream.
Everyone watching the stream sees this.
My gut feeling is this doesn't make any sense. Creators spend years crafting their brand, a design for their stream, and a unique experience for their viewers. To have it randomly disrupted by viewers seems counterproductive.
...for viewers too
Streamers put their carefully crafted experience at the mercy of their viewers'. But what about other viewers?
Don't forget: this interaction is seen by everyone on the stream.
It's not just clashing with the creator's experience of the product but also the viewers'.
Underlying product strategy
Twitch's mission is 'to create belonging by enabling streamers to build community' (source).
Using this public mission statement, I infer the following goal for the product team:
"The product team contributes to Twitch's mission by developing innovative tools that empower streamers to engage, interact, and grow vibrant communities."
Are Power-ups helping us achieve this goal?
They're not innovative (they've existed since 2016), they're not engaging (viewers spam them without control), they're kind of interactive (streamers might notice you), and they don't grow the community (none of this grows anything).
Without taking my product statement at face value (I made it up based on the company's mission), the concern stands:
How does this feature fit within a coherent product strategy?
Financial context
The last horizon I want to explore is Twitch's financial context.
Does the Power-up feature make sense financially? Is it due to make a lot of money? Are Twitch so flush with cash that they can afford to experiment?
Here's a snapshot of Twitch's in-app revenue over recorded history:
Revenue is down from ~100m in Q1 2021 (peak Covid) to ~28m in Q1 2024; a mere 72% drop. Ouch.
In January 2024, Twitch CEO also confirmed that Amazon is losing money on Twitch, even after laying off 500 workers (~30% of its staff). Double-ouch.
Twitch are struggling. Investing into a feature that (to me) goes against the overarching product strategy and disrupts core product experiences sounds frivolous.
Are Power-ups enough to buck revenue's downward trend? At $1.40 for 100 Bits, which is split between Twitch and the streamer, it would require a lot of usage for Twitch to justify this decision.
Diagnosis and alternatives
I would diagnose this as a prioritisation and execution mistake.
This can stem from plenty of places, including perhaps an internal stakeholder particularly keen on pushing this feature forward (we have all experienced this).
I dug into Twitch's UserVoice, a feedback forum where creators can suggest and vote on ideas. The most upvoted idea in the Bits section confirms our suspicions:
Is there anything else Twitch could have worked on instead?
Quickly scanning the 16,192 ideas (!!) generated by the community, we can find some excellent suggestions:
Use Bits to purchase subscriptions (1k+ votes)
Deeper analytics for ad revenue (2k+ votes)
Automatic subscription renewal for Prime members (2k+ votes)
And more. I'm sure there are hundreds more internally.
There should be no shortage of ideas that would truly move the revenue needle while supporting the product strategy.
Back to the drawing board.
Power-ups are an interesting product decision, especially given the UserVoice feedback highlighted. In the release notes, Twitch mentions that Power-ups cannot be turned off to maintain a ‘consistent viewer experience’ and suggests setting a higher price for each Power-up to reduce spamming. This feature appears to be a low-effort strategy to increase the average dollars spent via viewer engagement, adding a higher-priced option to encourage more Bit purchases and benefiting from the initial novelty as a ‘new’ feature.