Twitch Adds Microtransaction System Called Bits

By | 4 months ago 

Twitch is now testing a new way for viewers to donate money to their favorite streamers in the form of new emote and microtransaction systems called “Cheers” and “Bits.”

When Amazon bought Twitch for $970 million in 2014, some longtime fans of the streaming site didn’t know what to expect. Twitch had grown its membership base organically, and the idea of a corporate company worth billions swooping in to take control left some nervous about the future. Still, Amazon promised Twitch would remain independent and said that very little would change. For the most part, that promise has held up.

But Monday, Twitch introduced “Cheers”, a new option for viewers who want to donate money to their favorite streamers and it looks like it will give Amazon a significant new source of revenue. “Cheers” is a new emote option on Twitch that is powered by a microtransaction system called “Bits.” Viewers can only “cheer” for a streamer in Twitch chat by paying money.

Twitch explained the details on its blog:

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. Bits emotes can be used one by one, all at once, or anywhere in between. Using many at once shows more support and creates cooler emotes!

Cheering shows your support for the partner just like subscriptions do, and as you Cheer in a channel, you earn Cheer Chat Badges for that channel so that your support is recognized.

cheers and bits

Essentially, “cheering” is a way of donating money through an alternate currency. Viewers will give money to Twitch in exchange for Bits and then those Bits can be donated by the viewer to their favorite streamer through the Cheer emote system. All purchases of Bits will go through Amazon Payments where a one-time transaction of $1.40 will get fans 100 bits and higher denominations are available from there.

But here’s where it gets interesting. According to a thread on the Twitch Reddit, Twitch may be taking a significant portion of money off the top when it’s time to convert the donated Cheers/Bits back into real money for the streamers. To be clear, Amazon has not confirmed anything yet, but some early reports indicate that Twitch could be taking a cut of up to 29 percent.

It’s worth pointing out, as many have on Reddit, that if a fan donates money to a streamer through PayPal, which is the method most streamers currently use, PayPal’s cut is only about 3%. Theoretically, if all of the money donated on Twitch today was sent through the Bits system instead, streamers would lose a good chunk of their income due to Twitch/Amazon taking its cut off the top.

Introducing Cheering from Twitch on Vimeo.

To be fair, other fans have pointed out that an alternate currency that is officially sanctioned by Twitch might actually encourage more people to donate money than would otherwise do so.  Twitch officially getting behind donations could also potentially stop or lower PayPal chargeback attempts by troll viewers.

Overall, early feedback on the changes doesn’t seem especially positive but it may be a while until this all shakes out. Bits can only be purchased right now for a limited list of approved Twitch Partners. Twitch said on its blog that it hopes to roll the new system out to all Partners in the near future. No word yet on when or if non-partners will be able to get in on the action. If “Bits” does prove to be successful, it wouldn’t be surprising to see Google’s YouTube Gaming follow suit. In the meantime, Twitch will continue to work on other major projects, like developing a program to combat racism in its chat channels.