As posted on Twitch’s Twitter account:
— Twitch (@Twitch) August 25, 2014
According to a report in The Wall Street Journal, Amazon has acquired the video game streaming website, Twitch, for nearly $1 Billion.
Founded in 2011, Twitch allows users to broadcast themselves playing video games, and since then, its popularity has skyrocketed. It’s now the fourth-largest source of U.S. Internet traffic, beaten only by Netflix, Google and Apple.
In May of this year, Google’s widely publicized attempts to purchase Twitch broke down over an inability to settle their antitrust issues. The two companies were unable to agree on a breakup fee structure in the event regulators stopped the deal from going through. Since Google already owns YouTube, the top destination for videos (and a competitor of Twitch), the company feared regulators would disallow their dominance of the online video market.
For Amazon, the acquisition is part of a larger strategy to exert their influence into television and gaming. In April, the company introduced a handful of video games for Fire TV, Amazon’s streaming media box. Twitch will surely be able to enhance this service, as well as Amazon Prime, a membership program which includes music and video streaming.
Moreover, while Twitch has, until this point, been mainly used for eSports and video games, it’s not difficult to imagine the same technology working for many other live events, such as real sports events instead of just electronic ones. Additionally, the e-commerce giant sees the potential in redirecting Twitch’s primarily young, male audience towards its own website where they can buy games, controllers and consoles.
Even with its sole focus on video games, Twitch has produced billions of views every month. Last December, Forbes reported that Twitch receives 45 million unique viewers watching an average of 100 minutes of video a day. The championship for one of the services most popular games, League of Legends, received 32 million views alone. For comparison, the series finale of Breaking Bad received 10.3 million viewers.
One of the most surprising aspects of this deal, however, is that Twitch will remain independent of Amazon. For many gamers, the fear of heavier restrictions on the service was a real possibility. As has been its policy in the past, Amazon is allowing its newest subsidiary to run itself as it pleases, even as it makes Twitch its most important piece for entertainment dominance.