YouTube sees money in gaming-video eyeballs

Tue Apr 1, 2014 1:19pm EDT
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By Malathi Nayak

SAN FRANCISCO (Reuters) - To imagine how YouTube might one day become a money-spinner for content producers, consider the power of the irreverent video gamer and online star PewDiePie over his young, free-spending audience.

Each time the wildly popular YouTube impresario has donned Razer headphones in one of the many zany videos that feature him playing games, the product has sold out.

PewDiePie, who is not paid to endorse the brand, "really helped us in terms of getting traction on a much larger audience," said Min-Liang Tan, chief executive of San Diego-based Razer, which makes gaming hardware. "It's incredible that YouTube personalities are coming up ... and I think it can only grow."

PewDiePie's uncanny trendsetting talent highlights the potential that content related to video games holds for Google Inc as it looks for ways to build its YouTube video platform into a powerful new revenue stream.

Advertisers and media companies are indeed already placing big bets on the likes of PewDiePie and others creating gaming-related content in a bid for the prime but underserved audience of 18- to 34-year-olds that devour video games.

Just last week Walt Disney Co agreed to fork over as much as $950 million to buy Maker Studios, one of YouTube's largest production and distribution networks. PewDiePie, whose real name is Felix Kjellberg, is Maker's biggest star.

The success of the 24-year-old, with his profanity laced improvisational videos, matches the explosive growth of video-game-based channels on YouTube. His channel has more than 25 million subscribers who can view his content for free, more than Beyonce's and President Barack Obama's channels combined.

Video gamers, who spent more than $70 billion last year on hardware and software, have gravitated to YouTube. Two of the 10 most-subscribed channels and four of the most-viewed channels on YouTube are gaming channels, according to Zefr, an online video marketing and rights management company based in California.   Continued...

Visitors stand in front of a logo of YouTube at the YouTube Space Tokyo, operated by Google, in Tokyo February 14, 2013. REUTERS/Shohei Miyano