Twitch also risks being overtaken if it doesn't continue to innovate, added Bailey.
"As video becomes the default mode of consumption for an entire generation, so people will increasingly expect their services to be able to hop between devices as seamlessly as they do."
The YouTube mobile streaming service will be limited to Android devices, as it's currently not possible to stream content from an Apple device.
"Apple, or iOS more specifically, has a stricter and more limited policy of what apps can do on its devices," Tony Maroulis, senior mobile analyst for I.H.S., explained to CNBC in an email. "However, Apple also has a more rigorous process of app approval for its App Store, and an app is likely on its way, but it is currently under scrutiny for App Store approval."
The service will initially be available in Japan, which is the first Asian country in which YouTube Gaming was launched, but it is not yet known when it will be available globally.
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