【CyberTwitterX】How Puzzle & Dragons and FPS Game Streaming Disrupted the Industry's Power Dynamics【Gaming and Money】

Table of Contents

1. Introduction

2. Streaming Permissions and the Current Landscape

3. The Era of Live Services

4. Comparisons with the Music Industry: What’s Happening?

5. Is Gaming Diversity at Risk?

6. Does Ad Revenue Even Matter?

7. Conclusion

Introduction

Today, we’re diving into a topic that frequently comes up: Are game streams a bad thing? This debate used to be more prominent in the past, but I feel the situation has significantly changed over time. Yet, whenever this discussion resurfaces, it inevitably sparks arguments like, "Streamers should return their earnings to the developers," or accusations of freeloading. There’s also criticism about streamers earning too much money too easily or receiving excessive Super Chat donations.

This discussion pops up about once or twice a year. Just last month, during the Tokyo Game Show (TGS) in October, the topic gained traction again. A similar controversy arose last year, questioning whether game developers are truly benefiting from all this. To be frank, this mindset made sense until around 2012.

I figured many people might be interested in this topic, so I even conducted a poll in the community. Unfortunately, it lost out to the buzz around the PS5, but I received a ton of comments asking me to tackle this issue as well, so here we are.

Until around 2012, the general consensus was that monetizing gameplay footage without permission was outrageous. Back then, such arguments made sense. However, at some point, the entire structure changed drastically. One major issue is that many people discussing this topic today lack foundational knowledge about how we got to this point or the relevant context.

And so, this debate keeps resurfacing without addressing the core issues. No matter how many times we talk about it, nothing gets resolved. Why? Because no one explains it clearly or lays out the facts comprehensively.

That’s where I come in. Since I understand both the streamers’ perspective and the game companies’ side to a fair extent, I’ll break down the facts for you. With this context, you can form your own stance on the matter.

Let’s dive in.

Streaming Permissions and the Current Landscape

There’s this perception that streamers “get it,” likely because a handful of major creators are making enormous amounts of money—like VTubers who rake in over 100 million yen in Super Chats. These numbers make headlines, after all.

On the other hand, large gaming companies are generally proactive. They’ve established streaming guidelines, and when agencies are involved, permissions are often sorted out. Within the industry, those who see game streaming as a problem are truly in the minority. Honestly, I’ve never even heard such concerns raised. It’s not that people don’t talk about it; it’s likely that no one really thinks of it as an issue anymore, at least not among those in the know.

However, one crucial perspective that always seems to be missing in these discussions is the role of live-service games—or what we call “operated games” in Japan. Let’s quickly recap what those are: mobile gacha games like Puzzle & Dragons, Monster Strike, Genshin Impact, and Uma Musume Pretty Derby, or recent hits like Pokémon Sleep. On the console side, you’ve got PvP games like Fortnite and Street Fighter 6, which may be free or paid. Then there are long-term PvE (player-versus-environment) games like Monster Hunter with monthly subscriptions.

These all fall under the category of live-service games. Their key characteristic is ongoing online updates, coupled with inherently repeatable gameplay. They have no definitive end, so players can keep coming back. While they vary slightly in nature, their success largely hinges on player engagement. For example, free-to-play gacha games and PvP MMOs thrive on player influx. The more players join, the better. Companies pump money into ads because they know that increased traffic translates to revenue.

The rise of live-service games has rendered many of the old debates irrelevant. Arguments like “people won’t buy the game if they can watch it on YouTube” and “streaming acts as free advertising” are outdated. The conversation has evolved beyond those points. As I mentioned in a previous video, live-service games and traditional consumer games have entirely different dynamics when it comes to streaming compatibility.

Take gacha games like Monster Strike, which has earned over 1 trillion yen. These games don’t really have spoilers—there’s no overarching story to ruin. Instead, they thrive on attracting more players. The more people who join, the more likely they’ll eventually spend money on gacha draws. Friends joining in also boost motivation. Back in the day, gacha-related videos performed exceptionally well; viewers would watch others pull gacha and feel compelled to try it themselves.

For game companies, this is the ultimate promotion: showcasing actual users buying their products. It’s the same for PvP games like Fortnite, APEX Legends, and Street Fighter 6. Without a steady player base, these games would collapse. Watching skilled players can inspire others to play, and features like viewer participation let audiences interact with streamers directly. Streaming offers nothing but positives for such games.

Even older titles like Street Fighter IV gained popularity thanks to platforms like Nico Nico Douga. The same can be said for games like Mario Kart, Splatoon, Knives Out, and Shadowverse, which align well with streaming. Titles like Minecraft and GTA also remain strong performers on YouTube, continuing to attract views and engage audiences. These types of games not only have staying power but also support streamers and YouTubers who can make a living off their content.

Now consider a game like Final Fantasy XVI. How many streamers do you see making a career out of it? Story-driven games like that are done once their narratives are played through. The content quickly runs dry, and story-focused streams generally don’t perform well. In fact, silent “no commentary” playthroughs often attract more views than traditional streams for such games.

In contrast, live-service games excel because they’re free, constantly updated, and highly engaging, offering endless content opportunities for streamers. From a YouTuber’s or streamer’s perspective, these games are stable, reliable, and ideal for consistent content creation.

Returning to gacha games, their high average revenue per user (ARPU) means that even paying creators upfront to promote them proves cost-effective. This led to the rise of sponsored content and strengthened collaborations between game companies, YouTubers, and VTubers.

By now, it should be clear: when games with spoiler concerns restrict streaming (e.g., banning streams entirely or allowing them only after a set post-release period), streamers simply move on. They don’t cover those games, and as a result, those titles don’t get discussed. Streamers gravitate toward live-service games anyway. Even if JRPGs or adventure games aren’t streamable, it’s not a big deal for most creators. Look at Twitch’s game rankings—titles like Valorant, League of Legends, or GTA often dominate. These rankings fluctuate based on who’s playing and what’s trending, but live-service games consistently take the top spots.

Ironically, while some argue for streamers to give back to Japanese game developers, the reality is that many streamers don’t even focus on domestic games anymore. Instead, they thrive on content from international titles, especially live-service games.

The power dynamics have shifted. Game companies now often pay streamers to cover their titles and generate buzz. In the past, the relationship was more akin to today’s ties between game media and developers. But with the emergence of live-service games, disposable time has become a battleground. Players rarely move on from these titles, and as a result, new releases struggle to gain traction.

Recent examples like the failure of Concord (a new PvP title) and declining success for gacha game launches illustrate this. Even Pokémon Sleep relies heavily on its established IP. Meanwhile, older hits like Puzzle & Dragons and Monster Strike continue to perform well, and streamers stick to enduring games like Minecraft and GTA, which ensures they remain visible and relevant.

From a streamer’s perspective, it’s also becoming harder to see new breakout gaming personalities emerge. Most of today’s popular streamers built their careers around these evergreen titles.

The Era of Live-Service Games

Let’s talk about the current trend. Back when Persona 5 was released in 2016, streaming was prohibited. Atlus explicitly stated on Twitter, “Don’t spoil the game through videos.” Fast forward to their latest release, Metaphor: ReFantazio, and not only is the entire game streamable, but Atlus is also heavily sponsoring streamers, even during the demo stage. They’ve completely capitulated. Why? Because the fear of losing buzz and revenue by restricting streams outweighs any perceived risks.

Here’s the reality: even if a consumer hears about Metaphor and thinks, “Oh, that sounds interesting,” the moment they receive a smartphone notification that their favorite streamer is live, they’ll click on it, forget about Metaphor, and move on.

A notable example of this shift is Paranormasight: The Seven Mysteries of Honjo. Despite being a new visual novel and adventure game—genres not typically associated with streaming—it made the bold move of allowing its entire content to be streamed. The developers understood that without recognition, a new, original title wouldn’t even reach the starting line. It’s like launching a YouTube channel with zero subscribers; you need visibility just to have a chance.

Over time, this became the norm.

If we look back at the history of game streaming, over a decade ago during the Nico Nico Douga era, the idea of earning revenue by recording gameplay videos and uploading them was unthinkable. There wasn’t even a system for it back then. Moreover, there was a strong culture of backlash against creators making money. For instance, singers who released DVDs would get heavily criticized.

Things began to change when YouTube introduced monetization. Unlike Super Chats, ad revenue isn’t directly visible to viewers, which kept it low-profile. The transition from one platform to another also played a role. People moved from Nico Nico Douga to YouTube, and now TikTok is introducing a new generation of creators. Some viewers may scoff at creators from newer platforms, but every platform attracts fresh faces. YouTube, in particular, grew hand-in-hand with the rise of smartphones, which continually expanded its user base. This constant influx of new users eventually normalized the idea of earning money from game streaming. In many ways, creators like Hikakin Games solved this problem for everyone.

A significant turning point came in 2018 when Nintendo released its “Guidelines on the Use of Copyrighted Materials in Network Services.” Until then, game streaming was a legal gray area. Nintendo’s official acknowledgment of game streaming set the stage for other companies to create their own guidelines. While not overly strict, these rules provided a sense of legitimacy.

Why did Nintendo do this? Many credited the company’s “generosity,” but in hindsight, it’s clear they understood the evolving reality of the industry. Since 2012, games like Puzzle & Dragons and Monster Strike began reshaping the landscape. The arrival of Fortnite in 2017 further solidified this transformation.

As I mentioned earlier, live-service games have become overwhelmingly dominant. During the era of traditional consumer games, companies were often cold or outright hostile toward game streaming. They probably disliked it. But now, if a company like Nintendo were to prohibit streaming, creators would simply move on to other games. This isn’t a situation where a blanket ban would benefit everyone equally. For live-service game developers, influencer streams are highly profitable. The message is clear: “Stream our games as much as you want. You don’t even have to pay us; we’d gladly pay you instead.”

Even outside of live-service games, we’ve seen examples like Watermelon Game, where creators organically generate buzz. On the flip side, restricting streams can backfire. If the original Super Smash Bros. or Mario Kart is off-limits, imitators might create knock-offs and allow full streaming access. This could lead to scenarios where these knock-offs gain popularity simply because they’re streamable.

Nintendo likely realized in 2018 that the rules of the game had fundamentally changed. Their decision to adapt quickly was nothing short of remarkable.

Comparison with Music and What’s Happening

On Twitter, some people draw comparisons between games and music. The key difference lies in whether the content itself represents the entirety of the experience. For example, in gaming, this would apply to narrative-driven visual novels or streaming-only games. In music, once a song is played, there’s no need to purchase it anymore, right? That’s why official channels upload songs themselves, and royalties are automatically collected when others use the music.

Games, however, are completely different. Watching a Fortnite stream doesn’t mean you won’t want to play it. In fact, it often inspires the opposite reaction—you’ll want to play it even more. Personally, I hadn’t played League of Legends (LoL) in a while, but after watching a LoL stream recently, I felt the urge to jump back in.

Could developers regulate streaming if they wanted to? Sure. But would platform owners enforce such regulations? Likely not, as there’s no benefit for them.

This raises another question: do game developers fully understand what’s happening in the music industry? These days, musicians often make their work available on YouTube, sometimes offering their music as background tracks (BGM). Creators like us use those tracks, and every use generates licensing fees for the music rights holders.

For instance, you’ve probably heard how monetization for YouTube Shorts yields very little—about ¥0.01 per view, or ¥100 for 10,000 views. That’s painfully low, but for registered BGM, royalties of around ¥0.05 per view can accumulate. The figures vary, but if you create your own BGM and use it in your own videos, those views contribute directly to your royalties.

Let’s do the math: if your Shorts video gets 10,000 views and your BGM earns ¥0.06 per view, you’re suddenly looking at ¥600. With many Shorts creators hitting 100,000 views, that translates to ¥6,000. Suddenly, earning ¥6,000 per short video becomes a compelling prospect.

This has even led to people creating custom music for others, saying, “I’ll compose this track for you—please use it!” because it can still turn a profit.

It’s common sense for YouTubers and streamers to avoid copyrighted music that would prevent them from earning ad revenue. The same logic would apply if similar rules were imposed on games. Developers asking for royalties would likely find themselves ignored in favor of companies that say, “Stream our game as much as you want—we don’t need royalties. Your streams alone will generate profits for us.” Many companies have already adopted this approach, as it benefits them greatly.

This is why such restrictive measures won’t work in gaming. Instead, the industry is embracing streaming, as evidenced by Atlus and their handling of Metaphor: ReFantazio. The message is clear: “Stream it, or it’ll be forgotten.” This is the direction the industry is heading, and trying to reverse it feels out of sync with the times.

Will Gaming Diversity Be Lost?

So, what’s the real issue here? It’s the loss of diversity in gaming. If games that are compatible with streaming succeed, it means games that aren’t will inevitably fail. Genres like adventure games or heavily story-driven titles, which don’t align well with streaming, will decline. Just look at how SQUARE ENIX is struggling with franchises like Final Fantasy and Dragon Quest. It’s a sad reality.

However, the loss of gaming diversity has nothing to do with revenue-sharing structures. Whether or not a game allows streaming doesn’t change whether people will play it. If streaming is banned, people won’t play. If streaming is allowed but revenue is shared with developers, streamers simply won’t stream it. That’s all there is to it.

In my previous video, I talked about how the rise of Palworld signals the end of the IP era. This shift is inevitable, whether Nintendo wins or loses. It’s unstoppable. Ultimately, anything that doesn’t adapt to the environment will be weeded out.

While it’s easy to feel sorry for genres like adventure games facing decline, do you see what’s actually happening? It’s a battle for disposable time. That’s the core of the issue.

Does Ad Revenue Even Make Sense?

Modern people are glued to their smartphones, aren’t they? On train platforms, it’s just people walking around staring at their phones. This has been going on for over a decade, but now the landscape is completely different. There’s TikTok, Netflix, Twitter, Amazon Prime Video, ABEMA, LINE Manga, Piccoma… The list goes on. Competing in the entertainment industry with gaming is becoming increasingly difficult. The question isn’t about preserving diversity in games anymore—it’s about how the gaming industry can survive and thrive in such a competitive space.

This is why I feel people need to take these challenges more seriously. There’s talk about showing consideration to platforms, but platforms aren’t going to show consideration—they’re competitors. Games are battling YouTube, TikTok, Netflix, and others for people’s attention. The reason platforms like YouTube value gaming content is that it brings in viewers and generates ad revenue for them. If platforms started talking about giving back to game companies, the dynamic would change entirely. But from the platform’s perspective, the current situation is ideal, so they see no reason to change it.

As for game companies charging streamers, I don’t think it’s something they’d seriously consider. Why? Because it’s just a drop in the bucket. Take Final Fantasy XVI, for example. It doesn’t align well with streaming culture and has suffered because of it. I looked into the total views of its related videos, and it seems to have reached over 10 million, maybe even close to 30 million. Let’s assume it hit 100 million views—that might generate about 15 million yen in ad revenue. Now, if you were to split that and give half, say 7.5 million yen, to Square Enix, would it even make a dent?

With development costs ranging from 10 to 20 billion yen, that kind of revenue wouldn’t make any meaningful difference. And if people argue that this money should go to developers, then who exactly are we talking about? Should it be split among all employees involved in the development? That’s more of a salary issue within Square Enix itself.

Square Enix has capital reserves of 200 to 300 billion yen—they’re not short on money. The issue isn’t a lack of funds; it’s that they’re not distributing it as salaries. If developers want more money, perhaps the focus should be on raising wages. The money exists—it’s just not being allocated to the people.

Summary

In conclusion, we’re now in the age of live service games. Game streaming and streamers—more accurately referred to as “content creators” nowadays, including VTubers—have risen to prominence. Large-scale streamers, major VTubers, big game companies, and IP holders are all tightly interlinked, creating a stable structure where the same prominent figures and games dominate the scene. The current state of the industry leaves little room for newcomers to break in.

If smaller developers or creators want to sell a new game, the reality is that they often have to approach these prominent figures humbly and ask, “Could you please play our game?” Exposure through social media, videos, and platforms is essential to keep the game in people’s minds. Building strong relationships with influential content creators who have essentially become “talents” is now crucial.

Japanese companies like Capcom have been particularly skilled at navigating this landscape. Street Fighter 6 is an excellent example of a game that leveraged these dynamics to build excitement and engagement. This state of affairs could have been avoided if the industry had taken the rise of mobile games like Puzzle & Dragons and Monster Strike more seriously. When YouTubers playing those games started gaining massive popularity and unrelated YouTubers jumped on board, it marked the beginning of a new era. That was when game companies and content creators started collaborating closely to achieve significant success.

At this point, there’s little to be done about the current situation. The best approach might be to focus on creating reliable, safe, and original content that can sell. This discussion isn’t about what’s right or wrong; it’s simply the reality of how things have evolved. Personally, I think this trend is unavoidable, and there’s not much that can be done about it.

That said, I often gain new insights from your comments, so I’d love to hear your thoughts and opinions on this. Let’s keep the conversation going. Thank you for your continued support!