May 19, 2014
Google Eyes Video Game Streaming Service Twitch
Peter Suciu for redOrbit.com - Your Universe Online
Rumors began circulating on Sunday that Google was in talks to acquire video game streaming service Twitch for $1 billion. The entertainment industry trade magazine Variety reported that the search giant's YouTube was not only eyeing the popular streaming service, but apparently reached an all-cash deal that would be announced this week.
Neither Google nor Twitch has responded to the reports, however.
The San Francisco-based Twitch allows users to upload and watch free, live gameplay videos that could be streamed from Microsoft Xbox and Sony PlayStation 4 video game consoles. Variety's Todd Spangler reported that Twitch claims to have more than 45 million monthly users, including over one million members who upload videos monthly.
Twitch, which was launched in 2011, is also in talks to distribute video game-related programming from partners including CBS Interactive's GameSpot, Joystiq and Destructoid. In March a report from DeepField listed the service fourth in percentage of US peak Internet traffic, putting it ahead of Amazon, Facebook and Hulu.
In March of this year Twitch accounted for 1.35 percent of all downstream bandwidth on North American fixed access broadband networks, which is nearly a threefold increase from last fall.
The site was the brainchild of Justin Kan and Emmett Shear, the co-founders of Justin.tv, which is one of the first live streaming websites to host user-generated videos. The company changed its name to Twitch Interactive in February, and Shear currently serves as its CEO. Twitch has also raised about $35 million in funding.
In February Twitch made headlines when 120,000 people were able to play one epic game of Pokemon, according to the Washington Post. This was streamed to the "TwitchPlaysPokemon" channel, where gamers were able to take control of the characters via a chat feature.
Google-owned YouTube has reportedly made its own efforts to attract gamers, and The Guardian reported that YouTube launched its own platform for streaming of video game content at last year's Game Developers Conference.
While Twitch lags behind not only Netflix, which is the dominant video streaming service and according to recent reports accounts for more than a third of all peak Internet traffic, the video game streaming company also lags behind YouTube. However the acquisition of Twitch could help Google's YouTube become more attractive to advertisers as its large and growing audience does spend a lot of time sharing and viewing live gaming videos.
Mark Fisher, Qeilft's vice president of business development, told the Wall Street Journal on Monday that YouTube doesn't "have the engagement, and engagement is what drives advertising."
"Google can try to build this on its own or they can buy something that's already out there and doing well," he added.
The Journal also reported that YouTube's primary challenge remains how to find a way to sell ads at higher prices, given that there is a huge supply of videos available. Video games could be one answer – as it is already popular on YouTube. The paper reported that Felix "PewDiePie" Kjelberg's YouTube channel, which features video game montages, has 27 million subscribers. That is more than any other individual YouTube personality.