Updated: Twitch acquires e-sports advertising agency GoodGame

[Updated with interviews: 2:27 pm] Amazon’s Twitch gameplay livestreaming division has agreed to acquire GoodGame, an advertising agency dedicated to e-sports and live video game broadcasting.

The move is another big step to establish advertising as the foundation for e-sports and livestreaming of games by emerging broadcasting communities. Broadcasting e-sports events is a foundation of Twitch’s livestreaming of games, with an audience of 60 million monthly active viewers and 1.1 million broadcasters. No wonder Amazon acquired Twitch earlier this year for $970 million. And now those 1.1 million broadcasters have another way to build their careers as content creators.

GoodGame CEO Alexander Garfield said in an interview with GamesBeat that before starting GoodGame, he got into e-sports as a Counter-Strike pro player and a team manager. He helped teams find sponsors, and that ultimately led to the creation of GoodGame, which helped manage teams and even organized tournaments. Over time, GoodGame helped funnel more than $10 million toward players, teams, tournaments, and others in the e-sports ecosystem. It did so without raising any money.

“We made a decision to become a full service agency, working with third-party teams and broadcasters to help them grow via merchandising, endorsements, and custom content,” Garfield said.

The profession of being an e-sports player is so young that it isn’t easy to match brands and cyberathletes yet, Garfield said. The players and broadcasters need help with everything from creating their brands to cutting deals.

“If it were that simple, we wouldn’t be here,” he said. “Brands are still trying to find out how to enter this space.”

“This is a nascent space,” said Kevin Lin, Twitch chief operating officer, in an interview. “We have hired a sales team and dabbled in content creation. That has worked out well, and we have watched from afar as Alex has grown the business.”

Under Garfield, the company says it has created a model that keeps players and content creators focused on what they do well while monetizing their work more effectively via advertisements, sponsorships, and merchandising.

Over the past decade, GoodGame has built a business as an advertising agency geared toward the growing audience of gamers. It uses nontraditional engagement methods and digital media to court this audience, which is harder to reach than prior generations with TV advertising. For San Francisco-based Twitch, GoodGame could help increase the community of people who make a living by broadcasting their game sessions to spectators.

Twitch has had growing success with getting brand advertising from the likes of Sony Pictures, Warner Bros., and General Mills.