Amazon’s Twitch isn’t a Zumba dance move — it’s a game-streaming site that’s now a subsidiary of the biggest online store in the world.
The two companies confirmed the acquisition today, which will cost Amazon $970 million in cash. Once the deal closes, Amazon will host live-broadcasted gaming-related video for more than 55 million monthly viewers. Twitch is by far the biggest destination for gaming-specific live video. Its 1 million broadcasters, which livestream video from pro-gaming tournaments, charity events, and more, have made Twitch the fourth most-trafficked site behind only Netflix, Google (which includes YouTube), and Apple. The site is also a magnet for marketers looking to reach out to an engaged audience of young people, and Amazon may have the power to turn that into a serious profit-generating machine.
Amazon is turning more and more to media. Its Prime service offers a Netflix-like streaming functionality of shows and movies, and the company may see game-related video as the future of content.
“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 — from The International [Dota 2 e-sports tournament], to breaking the world record for Mario, to gaming conferences like E3. And amazingly, Twitch is only three years old,” Amazon chief executive officer Jeff Bezos said. “Like Twitch, we obsess over customers and like to think differently, and we look forward to learning from them and helping them move even faster to build new services for the gaming community.”
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While Twitch is only three years old, it has built up its massive audience by appealing directly to the most hardcore and dedicated fans of gameplay broadcasting. In what was likely preparation for this deal, the company recently upset some of its viewers and broadcasters by making changes to how it stores archived video and how it deals with copyrighted audio in those saved clips. Despite ruffling those fans, few competitors have stepped up to challenge Twitch as a video platform for gamers. And this deal could strengthen its hold on this segment of the market.
“Amazon and Twitch optimize for our customers first and are both believers in the future of gaming,” Twitch CEO Emmett Shear said. “Being part of Amazon will let us do even more for our community. We will be able to create tools and services faster than we could have independently. This change will mean great things for our community, and will let us bring Twitch to even more people around the world.”
This deal comes despite our previous report that Google cemented its purchase of Twitch. While our sources confirmed that deal was as good as done, it obviously fell through.
While this deal might not make a lot of sense that think of Amazon as the place where they go to buy Christmas gifts and Kindle e-book readers, Bezos’s company has quietly established a potentially strong game-production business.
Amazon has a number of gaming-capable devices now. Its Kindle Fire tablet, its Fire Phone, and its Fire TV are all capable of playing Android games. But the gigantic conglomerate isn’t just opening a store like Apple and Google and letting developers release games — Amazon has made a number of major hires to form its own Amazon Game Studios.
Portal designer Kim Swift, Far Cry 2 director Clint Hocking, and Killer Instinct (Xbox One) studio Double Helix are all working for Amazon’s gaming division. So far, those hires haven’t resulted in many projects except for a sci-fi shooter for the Fire TV called Sev Zero.
While Amazon has a very diverse portfolio, today’s Twitch deal is further evidence that the company sees a lot of money in gaming.