Fanbyte, G4 Layoffs Speak to Some Hard Truths
The cost and oversaturation of content in gaming media is spelling bad news in terms of ROI.
Around midday on Thursday, the gaming circles of Twitter lit up: Fanbyte, a gaming media company backed by Chinese megacorporation Tencent, had laid off more than a handful of its staff—including some of its highest-profile talent.
It marked the second major gaming media layoff in back-to-back days. On Wednesday, G4, the Comcast NBCUniversal gaming programming channel, let go of 20 to 30 of its staff. Both layoffs are a continuation of a sad and increasingly long list of gaming outlets that are either making significant reductions or ceasing to exist altogether.
But something’s different about these two layoffs when compared to some of the ones from earlier this year.
Tencent and Comcast NBCUniversal aren’t penny-pinching. These are the 15th- and 65th-most valuable companies in the world, worth $362 and $150 billion dollars, respectively. Earlier this year, both Upcomer and Inven made sizable layoffs, but those websites are owned by much smaller companies with much more unstable finances.
Now, I want to preface the rest of this article with a caveat: None of these layoffs fall on the shoulders of the journalists, creators or regular employees working at these two companies. It is a sensitive time for them and I wish all of them well. I hope their talent is recognized and appreciated elsewhere and they all go on to have successful and fruitful careers.
Having said that, I want to talk about the business and why two of the world’s most valuable companies likely made these decisions—with the experience and insight of someone who was included in layoffs by an entertainment giant, Disney, almost two years ago at ESPN.
What is very clear about both layoffs and the companies involved is that the content is not resonating widely enough to turn revenues.
G4, the late 2021-relaunched channel, is struggling to find an audience, while simultaneously spending copious amounts of cash on creating its programming. In the past 18 months, the program has paid for broadcasting rights to games such as “Dungeons & Dragons,” “Lost Ark” and “Fortnite.”
And after hiring high-profile, but less-costly talent—and failing to produce significant results—it’s now pivoting to a completely different strategy: Hiring even more expensive talent in some of Twitch and YouTube’s most relevant gaming-adjacent influencers.
In the past few months, the network has launched new shows with AustinShow and Will Neff, but rather than show them on the G4 channel, both have broadcast these shows on their channels, all while G4 eats the expense.
Live viewership numbers have been relatively good—mid-to-high five-figure concurrent viewership numbers on Twitch. But on YouTube, the content is not performing at all. Numbers average in the mid-four-figures—with some exceptions in the five-figure range—but some videos have just hundreds of views.
Meanwhile, the talent appearing on these shows and presumably getting paid handsome fees to be there include: Ludwig Ahgren, QTCinderella, Mia Malkova, Hasan Piker, Valkyrae, Mizkif and Amouranth, to name a few.
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If you’re not familiar with those names, I’ll put it plainly: These are some of the most important people currently creating content for a gaming audience—even if their content deviates from gaming—and almost all of them are in the top 100 of Twitch’s monthly viewership rankings month over month. Some have even held the No. 1 spot before.
So imagine for a moment the cost associated with that, versus the return. Even on generous CPMs—how much a channel is paid per 1,000 viewers—there’s no chance there’s a recoupment being made. Good for the streamers, bad for the network.
One of G4’s saving graces is that it’s on linear television, and because of its parent company, it receives a portion of cable subscriber fees for most TV watchers in America. That can offset some of the shortfall, but it doesn’t excuse the lack of resonance on digital media.
Older readers of this newsletter are likely familiar with G4 in a different context. Early 2000s Millennials will know G4 for its edgy, somewhat callous comedic gaming content, peppered in with game reviews and developer interviews.
Its relaunch included some of this content, rebooting shows like “Xplay” and “Attack of the Show,” but what investing in those programs again fails to recognize is that gamers have moved on.
For the past decade and change since G4 went off air in the mid-2010s, the Internet has become highly accessible. So has an easier, less-time-consuming and less-costly—if you don’t have cable—way to access the content. Those shows might’ve resonated with teenagers and early 20-somethings in 2004. The average 14-to-25-year-old watching gaming right now could not give a damn.
When G4 announced it’d be returning in 2020, a lot of fans were excited. There’s a certain nostalgia associated with it, and industry insiders, yours truly included, expected that G4 would succeed, especially compared to VENN, a competing programming network whose pockets aren’t nearly as deep.
VENN blew through $43 million in less than two years, building a television-style studio in Los Angeles and committing to developing another in the World Trade Center in New York. Less than a year after it went live, reports of layoffs came out, followed by even more and eventually the entire network shutting down. It went up for sale in July. As far as I’m aware today, no one has bought it.
G4 is now seemingly going through the same motions. It relaunched in November 2021. It’s now laying off people in September, less than a year later. It built a fancy studio and office in Los Angeles. Meanwhile, it’s drawing fewer viewers than many hundred Twitch streamers in their bedrooms across the world. One thing is clear about gamers: They couldn't care less about production value. The content is what matters, not the setup.
As for Fanbyte, the site is shockingly small. SimilarWeb estimates it brought in about 4 million page views per month in July, tiny in comparison to even esports sites such as my former employer Dot Esports (16.9 million in the same period) and Dexerto (25.7 million), much less the broader gaming websites that Fanbyte competed with for traffic, like IGN (97.1 million) and GameSpot (75.1 million).
But in the staff market Fanbyte was competing for some very talented people who I’m certain commanded solid salaries, at least for games journalism. It poached Elise Favis, a fantastic reporter who was part of The Washington Post’s founding games journalism team, and Imran Khan, who cut his teeth at places like Kinda Funny, IGN and Game Informer. A lot of incredible journalists have gone through Fanbyte the past four years.
But with such low traffic, there’s no route to economic viability.
I understand the layoffs from a business point of view, but of course, like many such things, they were done in poor form. If management couldn’t get an affected staff member on the phone, they laid them off over email. Ouch.
Well this is easily the most fucked up way this has ever happened to me. They laid me off while I was asleep in another country.
— Imran Khan (@imranzomg)
Sep 15, 2022
In its laid-off staff’s stead, the company is seemingly pivoting to guides. It has appointed Dillon Skiffington, who, to be clear, is a very kind journalist who’s not responsible for any of this, to lead the website. Skiffington has been the editor for game guides at the website. I’m confused and perplexed how pivoting from one saturated vertical (gaming news) to another is going to fix the website. My guess would be it won’t.
What both these layoffs boil down to is a vital misunderstanding of what resonates with gamers from the highest level. It’s not highly-produced talent pieces. It’s not aggregated games news colored in with opinion, either. There’s no right answer here. But there are a lot of wrong ones.
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