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The idea of Twitch Plays Pokemon is simple. The Twitch stream shows the gameplay (screen), alongside a total timer and list of commands being sent to the game and the author of said command. The social stream (chat window) is where users of Twitch type commands (button presses) that the game should perform given a current action.
This concept is fascinating because I could see this tool being used for instructional experiments, both in problem-based learning, collaborative learning, and anchored instruction.