Amazon beats Google to buy Twitch for $1bn

The tech giants were falling over themselves to snap up the three-year-old video game live-streaming startup.

by Rachel Savage
Last Updated: 26 Aug 2015

Back in July, the rumour mill had it that Google was poised to snap up video game live-streaming startup Twitch for around $1bn (£603m). One month on and the search giant has been trumped by Amazon, as America’s tech leviathans battle each other to tie up new markets in their quest for growth.

The all-cash deal for the three-year-old company, which was also being sniffed around by Yahoo, was sealed for $970m – Amazon’s biggest acquisition since it bought online shoe retailer Zappos for $1.2bn in 2009. Twitch had previously raised $15m and $20m in September 2012 and 2013 respectively, so its value looks to have increased massively in the last year.

‘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,’ said the startup’s chief exec Emmett Shear, presumably to ward off the inevitable gamer conspiracy theories.

What’s all the fuss about then? To those not attached to their joysticks, the allure of broadcasting and watching live gameplay seems a little obscure. But it will help Amazon expand its Prime TV and film streaming service and the options available with its Fire TV set-top box, which can already come with a gaming controller. And it is a fast-growing and not-so-little niche.

When Twitch was founded in 2011 it had 3.2 million monthly users; in July it had 55 million. Some of its most popular players rake in six figure salaries from a 50-50 split in advertising revenues, $5 monthly subscription fees to their channels and even the occasional spontaneous fan donation. And gaming tournaments are increasingly lucrative – Dota 2 International's prize money was almost $11m this year.

‘Within video and gaming it seems [Amazon] want[s] to be more of an original producer,’ IBB consulting analyst Jonathan Weitz told the FT. The ‘millenial male’ audience – and one with ‘high engagement’ at that – was hard for advertisers to get to elsewhere, he added.

It’ll be a disappointment for Google, whose bread and butter is of course ads. But the battle to break new ground for today’s tech giants is far from over.

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