Newcastle, had been playing in the most difficult Hardcore mode, which means his character cannot be brought back to life.
Having walked 6,316km, flown 7,798km and jumped 732,389 times, he had got "a bit full of myself" and been startled by a zombie baby and eaten by a spider.
He says the five-year game is a record.
"It was never about being the best or the longest, I just liked playing it and managed to survive," he told BBC News.
"I started saying I was the world's longest Hardcore survivor because I couldn't find anyone else.
"We couldn't find anyone who had lasted more than a couple of months."
Mr Watson plays Minecraft most days, averaging about 20 hours a week.
For those familiar with Minecraft, Mr Watson's character was attacked by a zombie baby wearing enchanted armour.
He ran away from it and was shot in the back by a hidden skeleton, which knocked him into the spider.
He could have survived all of this if he had eaten a health-giving golden apple sooner, he said.
"I ran out of luck," Mr Watson said.
"There's so much I could have done, I felt stupid making such an easy mistake."
Mr Watson has more than 3,500 followers on YouTube and nearly 2,000 on game-streaming platform Twitch, where he is known as Philza and met his fiancee, Kristin Rosales.
And he is already is thinking about returning to Minecraft.
"When it first happened I was so depressed I thought I didn't even want to look at Minecraft right now, I didn't ever want to see a zombie again," he said.
"But I'm starting to get that urge to create something and go on another journey."