The answer depends on whether you are operating a business with the intent to make money as a Twitch Streamer or whether you are doing this as a hobby.
If you are treating it as a hobby, you cannot deduct any expenses on your Federal return (but you can deduct them in certain states). You would only report your income.
If you are treating this as a business, then both your income and expenses will be reported on Schedule C. Then any ordinary and necessary expenses that you incur in the operation of your business would be deductible. The cost of games you purchased for business use would be a business expense. The streaming mic would be entered as an Asset to be depreciated if its useful life is greater than one year.
To learn more, take a look at the following similar question. The information provided by Tax Expert BillM223 is very detailed.
I stream on Twitch, how do I report my 1099-MISC as a hobby? I do not consider it to be a business e...
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