Influencers in the video game industry are evolving from playing games to making them.

Over the weekend, One True King, a media company focused on gaming content, launched Mad Mushroom, a new publishing division.

“We have a unique competitive advantage in this space,” said OTK co-founder Asmongold, a top streamer on Twitch, Amazon.com Inc’s livestreaming platform. “We can give games the push they need to actually go out to market, get eyes on the game and give (developers) insight.”

Moving forward, OTK’s stable of gaming influencers will collaborate with lead adviser Mike Silbowitz, a gaming industry veteran who has previously worked at Square Enix Inc, to publish, distribute, test and market games.

Currently, publishers pay top influencers tens of thousands of dollars to demo new games in front of their sizable audiences of live viewers on social media platforms, particularly Twitch and Google’s YouTube.

According to company executives, by reducing such marketing and user-acquisition costs, the organisation can take a reduced cut of sales, say, 30% rather than the regular 40% or 50%, potentially benefiting the makers of independent games.

“Twitch streamers have a large tool that is effectively a non-cost, which is their time and their audience,” Asmongold said.

Influencers are increasingly diversifying their income streams beyond social media networks, which can be culturally and financially volatile. Popular gamers have said they anticipate that selling products directly to their audience will eventually form a larger fraction of their revenue.

Top streamers, particularly those who have carved out a niche within a specific genre, are looking to publish and advise on both top tier and indie games that might appeal to the specific tastes of their fans.

Earlier this year, Michael “Shroud” Grzesiek and Chris “Sacriel” Ball, who have a combined audience of 11 million followers on Twitch, announced they would be teaming up with studio Splash Damage to create an open-world survival game. In 2022, Guy “Dr Disrespect” Beahm, a streamer known for playing first-person shooters, revealed Deadrop, his own entrant into the genre.

Influencers are also taking advantage of new opportunities from gaming companies that allow users to remix and design original versions of their favourite games. In April, five streamers known for playing Epic Games’ Fortnite came together to announce a new title, Project V. Using tools from Fortnite Creative, which lets players make their own games, the streamers are working with developers to create an experience they believe will appeal to their many followers.

A similar phenomenon is happening in Minecraft. In 2022, popular streamer Tobias “Tubbo” James Smith launched TubNet, a Minecraft server catering to fans of the hugely popular game.

Such diversifications aren’t without risk. Even small and independent games can cost as much as hundreds of thousands of dollars to publish and from one to five years to make. One of the biggest expenses is the advance supplied to developers, said Kellen Voyer, a lawyer who negotiates contracts with gaming companies. “The earlier on the game is, the more money,” he said. “That’s the biggest line item.”

Beyond the price of marketing a new game, publishers must also contend with the cost of porting games onto several devices and localising them into several languages.

On Saturday, OTK hosted an exposition, showcasing 30 video games with titles ranging from Toxic Crusaders to Turnip Boy Robs A Bank. During the livestreaming event, fans and influencers picked their two favorites, with the winning games receiving US$25,000 each.

Mad Mushroom is looking for investors, according to executives at OTK, who said their goal is more about enriching the ecosystem than turning a profit.

“I don’t think we are unconcerned with profitability, but...that’s not why we’re doing it,” Chief Strategy Officer Zachary Diaz said. “More games being successful is good for gaming content creators.”

 - Bloomberg