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Channel points on Twitch: a blurring line between video gaming and gambling?

Updated: Oct 13, 2022

Pieterjan Declerck, 24 June 2022, updated 26 september 2022

This blogpost briefly addresses the topic of channel points on the livestream platform Twitch, an emerging phenomenon which may be seen as an example of blurring lines between video gaming and gambling. On Twitch, it has been possible for a while now to collect channel points when watching a stream. Stream viewers gather channel points merely by watching the stream and subscribed members of the channel (i.e. viewers who pay around 5 euros monthly to support the streamer) sometimes gather points faster through a subscriber multiplicator. To illustrate with a fictional example, watching the stream for 1 hour can give you 100 channel points, 150 if you are a subscriber, and 200 when you have been subscribed for one year or more. When watching the stream, periodically (e.g. every 10 minutes of uninterrupted viewing) bonus channel points are presented to the viewer, who has to click a pop-up button to get +50 channel points. Not clicking the button results in not obtaining the bonus points.

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From the outset, viewers were able to unlock basic rewards with channel points, such as a channel emoji specific to the streamer, or the highlighting of a sent message in the chat. As time went on, more and more channels on Twitch started to use the personalised version of the channel point reward system. More specifically, the rewards obtainable with channel points could be invented by the streamer as well as the number of channel points required to unlock them. A wide variety of rewards were introduced, for example doing 10 push-ups during the livestream, reading the weather forecast, viewing a picture or a video, reading a personalised message, playing a game or a character; each reward for a different amount of channel points decided by the streamer. The more ‘unique’ rewards required substantial amounts of channel points. For example, whereas watching a viewer-chosen video on stream would only require 5000 channel points, having a viewer decide which game the streamer should play would require over 100,000 channel points.

At first this was mostly fun and games and at the same time a good mechanic to reward loyal viewers. But soon two evolutions took place: (1) the implementation of predictions and (2) the introduction of rewards with monetary value.

At a certain point in time, it became possible for streamers to organise predictions during their stream (note that certain countries do not allow the prediction mechanism, e.g. Denmark, the Netherlands or Sweden). The prediction mechanic enables viewers to wager their channel points on one of the outcomes put forward by (the moderators of) the streamer. Twitch allows for a maximum of ten outcomes for a given prediction, in practice most predictions use two possible outcomes. Common examples are predictions related to the outcome of a game the streamer played, e.g. ‘Will [streamer] win this game?’ or ‘Will [streamer] get X number of kills (for shooter games) or score X number of goals (for sports games)?’. The streamer launches the prediction and for a set amount of time (e.g. 1 minute) viewers are able to wager part or all of their collected channel points on one of the outcomes of the prediction, in practice oftentimes ‘yes’ or ‘no’. At the end, the predication mechanism analyses how many channel points were wagered for each outcome and sets the multiplier values for each of the outcomes. Take the hypothetical example of 1 million channel points wagered: 400,000 on yes and 600,000 on no. This means that viewers who voted yes will get a higher multiplier compared to the no voters who get a lower multiplier, because more channel points were wagered on the ‘no’ outcome. For the winning outcome, each viewer’s channel points are returned multiplied by the multiplier value.

Predictions can be about random events (i.e. the streamer and/or viewer has no influence over the outcome), but can equally be about events where the viewer’s knowledge – of the game or of the streamer’s skill regarding the game – is helpful to make a more ‘calculated’ wager. There are other interesting discussions to be had regarding this mechanic, for example about streamers’ ability to influence the outcome of the prediction, but for this blogpost the key message revolves around the combination of the prediction mechanic and the possibility for viewers to unlock rewards with monetary value. More specifically, numerous streamers offer channel point rewards that have a real-world value, for example a subscription, a donation by the streamer to the viewer, a gift card, or a gift such as a PlayStation or an XBOX console. These rewards oftentimes require substantive amounts of channel points (e.g. multiple thousands or millions).

The problem is that it can be argued that in these situations, viewers are implicitly encouraged to participate in the predictions if the monetary rewards appeal to them. This is because obtaining the required amount of channel points through viewing alone is very difficult and sometimes even impossible, which leaves only participation in the predictions as a method to obtain the required channel points more quickly. In other words, viewers are in some situations encouraged to wager channel points because they can be converted into real-money rewards. If instead of buying a subscription or going to a store and buying a PlayStation 5, you can watch a streamer and try to ‘predict’ outcomes to multiply your channel points and obtain the subscription or the PlayStation that way (i.e. for free because channel points do not cost money), this whole mechanism comes dangerously close to gambling and is related to video gaming as well because the predictions are predominantly centered around gameplay elements. In its terms of service, Twitch provides an ‘exemplary list of guidelines’ for streamers to follow, which includes the guideline ‘do not create points redemption opportunities that constitute gambling’. In practice however, even though the channel points as such do not necessarily have real-world value (something which is pointed out by Twitch in their policy), the ability to convert them into rewards which do have real-world value brings the channel point prediction mechanism dangerously close to the concept of gambling.

Therefore, it will be interesting to follow how this situation that exemplifies blurring between video gaming and gambling will evolve, as well as whether regulatory attention will be given to the potentially gambling-like character of the channel point-prediction mechanism.

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