Tech News: Amazon Buys Twitch for US$1bn

August 27, 2014
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A bit of a surprise on Monday, August 25, as Amazon purchased the video game streaming platform Twitch Interactive for $970 million in cash, as it broadcast to all and sundry that it is seriously ambitious about expanding its presence in gaming, according to Business Insider.

With video gaming becoming a serious online spectator sport, the realization has come upon the big boys that tens of millions of folks all over the world will pay serious bucks to watch gameplay on live video feeds. If it can be boffo with boxing and wrestling, why not with video gaming and why not betting and odds making (well, where it’d be legal, of course), which are becoming increasingly lucrative. According to Games Beat, Twitch had 55 million unique visitors in July, most of whom went to the website to watch other people play games competitions interspersed with advertising.

“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,” said Amazon CEO Jeff Bezos in a statement.

Tech News: Amazon Buys Twitch for US$1bn

Having just introduced its own smartphone, the Fire, this month, earlier this summer, it had already added same-day delivery and a set-top video streaming device to its list of services for members of Prime, its $99 annual loyalty program. The deal is the latest example of Amazon expanding into new commercial arenas. Undergoing much criticism for what the late comedian Robin Williams referred to as being “A smiling green oligarch on a quiet power trip,” Bezos doesn’t want to be seen as a Fascist lout out to destroy the modern publishing industry, as the last chains of bookstores are run out of North America at his fanatical behest.

Well practiced at the art of distraction, Amazon already has an in-house gaming studio that makes games, and its Fire TV set top box is already designed to attract gamers. While boomer authors like Stephen King, Anne Rice and John Irving work the talk-show circuit attacking Bezos and Company for being the fat, patient man who spends the weekend at the all-you-can-eat buffet patiently consuming everything, Amazon’s PR machine is practicing its own means of damage control by getting business done in a more subtle way in the youth vid gaming market.

Meanwhile on Twitch TV, their savvy CEO Emmett Shear broadcast live on August 25, insisting Amazon is a perfect partner because “they believe in our community, they share our values and long-term vision.” This is an interesting comment on Shear’s part considering Google had been in on/off talks to buy Twitch for at least six frustrating months, although clearly no deal materialized.

Forrester Research analyst James McQuivey believes Google would clearly have been a better, more instantaneous fit for Twitch. “Twitch will be a harder asset for Amazon to use. It doesn’t have the kind of video streaming audience that Google’s YouTube does.” However, McQuivey also noted that Amazon is trying to own more of its own content rather than simply selling others’ and Twitch could help the company do that.

Only just launched in October, 2011 to focus on live video for gamers, Twitch had by July 2014 claimed that its users viewed more than 155 billion minutes of content produced by more than 1 million broadcasters, ranging from individual gamers, pro players, video game publishers, not developers and others. This is pretty amazing growth. Above all, the folks at Amazon will be licking their lips in contemplation of digital video advertizing in the U.S., which is estimated to reach $5.96 billion this year, according to eMarketer, up an amazing 41.9 percent from 2013.

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