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Summary:

Youtube super-channel Machinima is raising $80 million to create a subscription-based on-demand gaming channel, according to a new report.

MachinimaShows

Gamers are a rabid bunch, consuming as much game-related media and merchandising as they can, and developing tightly knit communities because of it. But is this niche audience big enough to sustain a subscription-based, on-demand content network?

Machinima, a gaming content company that also happens to be the seventh-largest YouTube channel, is trying to raise $80 million to find out, according to a report by Reuters.

The company, which was founded in 2001, has 8 million subscribers on YouTube. Its rich fanbase is mostly males ages 18-34, and they spend a lot of time with the channel. According to the company, they watch more than 2 billion videos and spend more than an hour viewing on average every month.

In order to keep up with the user base, Machinima now works with more than 7,500 content producers worldwide (many of them gaming fans looking to make some extra money off of their video walkthroughs and play sessions). They produce a mix of gameplay videos and original content — which is what Reuters says will be the basis of the Netflix-like network.

But Machinima is still unprofitable and, according to some recent reports (here and here), is at a crossroads: It either needs more capital to help finance a new business strategy, or, it needs an exit of some kind. The $80 million (on top of the $35 million it raised from Google and others last year) would presumably give the company more breathing room to prove that it can actually turn a profit by creating an on-demand content app.

Machinima CEO Allen DeBevoise told Reuters that the company  plans on creating traditional, commercial-free, 44-minute episodes that cater to the game-loving audience. According to the report, the company is in talks with two Hollywood studios to produce content for the network, or possibly become investors.

Gamers are definitely willing to part with their money for quality content. Comedian and prominent Internet personality Toby “Tobuscus” Turner, who has 4 million subscribers on his own channel, recently raised nearly $650,000 on Indiegogo to make his own game. Meanwhile, livestream gaming site Twitch.tv has 24 million users per month, often for shows lasting hours at a time. It has become the go-to platform for gamers and developers to raise money either through Paypal donations or advertising.

The reason that gaming media has become popular on the Internet is can be boiled down to the fact that gamers love watching games, and want to hear smart opinions about them. That’s what drives the popularity of big outfits like Machinima, smaller places like Rev3 and even individuals on Turner. Whether it’s Let’s Play videos, tournament coverage, or live from the convention floors, content about gaming does its best when its authentic and immersive.

If Machinima expects to tap into their loyal fanbase’s wallets, then those core concepts shouldn’t be abandoned in favor of flashy show gimmicks or reality TV pandering — that’s  how G4 was killed last year.

  1. very interesting and unique idea, I think they are headed in the right direction. I mean the numbers clearly show that there is a large audience out there for web videos, specifically of the video game variety. I am not so sure Machinma is the ones to bring high quality lengthy content that everyone will enjoy though. There best work always come in the shorter and less scripted stuff. Much of their other work really falls flat

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