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Amazon's Twitch Lowering Non-U.S. Subscription Prices

By Eric Volkman - May 17, 2021 at 8:55PM

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But there are concerns that this will affect the revenue of game streamers.

A subscription to Twitch, the durably popular video gaming chat and broadcast service operated by Amazon.com (AMZN 2.07%), is about to get cheaper -- but there's a catch.

On its official company blog Monday, Twitch announced that it is reducing those costs, however only in certain countries outside of the U.S. It's doing so because the cost of a monthly subscription at the company's Tier 1 level is $4.99, and while that's easily affordable for many American gamers, it can be prohibitively expensive in economically weaker nations.

Seated woman using a gaming PC.

Image source: Getty Images.

The Amazon unit added that over the course of the next several months, it will adjust its subscription prices based on the affected countries' cost of living. This will start later this week -- Thursday, May 20, to be exact -- with users in Mexico and Turkey. Following that, Twitch will make similar tweaks to the prices for users in most countries located outside of North America and provided a comprehensive list of those nations.

It did not say what the new prices would be for Mexican and Turkish Twitch subscribers, nor did it provide more precise details of pricing or timing elsewhere.

Addressing concerns that the price cuts would result in lower revenue for video game streamers, Twitch is rolling out a one-year program that guarantees certain minimums for those people. It stipulated a new set of parameters for this in its blog post.

"Creator revenue is obviously really important, and we've kept them front of mind with every decision we've made," Twitch wrote. "Across the board, our tests clearly showed making [subscriptions] more affordable for more viewers boosts creator revenue."

On Monday, in contrast to the 0.3% fall of the S&P 500, Amazon stock rose by almost 1.5%.

 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.

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