August 26, 2014
Amazon Announces Surprise Acquisition Of Video Game Streaming Service Twitch
redOrbit Staff & Wire Reports - Your Universe Online
That deal was worth a reported $1 billion, but on Monday, Chris Welch of The Verge explained that Twitch had reversed course and reached an agreement with the Seattle, Washington-based e-commerce giant instead.
“We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster,” Twitch CEO Emmett Shear said in a statement. “We’re keeping most everything the same: our office, our employees, our brand, and most importantly our independence. But with Amazon’s support we’ll have the resources to bring you an even better Twitch.”
Welch and the Wall Street Journal reported that it was an all-cash deal worth about $970 million, while Bloomberg writers Adam Satariano and Brad Stone called it Amazon’s “biggest acquisition ever” and said sources told them the dollar figure was closer to $1.1 billion.
“Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month... and, amazingly, Twitch is only three years old,” Amazon founder and CEO Jeff Bezos added in a separate statement. “We look forward to learning from them and helping them move even faster to build new services for the gaming community.”
Twitch was founded by Shear and Justin Kan in 2011, and according to Wall Street Journal reporters Douglas MacMillan and Greg Bensinger, network research firm DeepField Inc. said that it is the most popular online destination for watching and broadcasting video game play and the fourth-largest source of Internet traffic in the US. In February, it accounted for a reported 2 percent of all US Internet traffic, they added.
“Before today's curve, a pairing between YouTube and Twitch made a lot of sense,” Welch said. “Many gamers upload highlights, impressive level playthroughs, and other content to YouTube. But there's no mistaking the fact that the game-streaming revolution is happening at Twitch. With over 55 million monthly visitors, the site has become so popular that it's faced challenges trying to scale for its ever-growing audience.”
“YouTube's vast infrastructure was seen as a logical answer to that problem when reports about an acquisition first surfaced in May,” he added. “At first glance, Amazon seems like a less ideal fit. Infrastructure isn't at all a problem; Amazon's AWS and cloud computing services can provide Twitch anything it needs and then some in terms of resources and reliability. But from a culture perspective, the link isn't as obvious.”
However, Welch added that Amazon has long expressed an interest in the gaming industry, as demonstrated by the way that it encouraged developers to publish software for its Kindle Fire tablets and its Fire TV hardware. A Twitch app for the online retailer’s set-top box first launched in May, he added, but acquiring ownership of the company is the boldest statement yet that Amazon is serious about becoming a serious player in the gaming industry.