Amazon Purchases Game Streaming Platform Twitch for $970 Million

Amazon.com announced this week that they are agreeing to acquire video site Twitch for $970 million in cash. This is slightly shocking since only months before, Google’s YouTube had a deal to attain Twitch. The Information, a business blog, announced that this is the latest sign of the e-commerce giant’s expansive ambitions in the video entertainment industry.

Jeff Bezos said during a press release, “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.”

Twitch was originally an offshoot of Justin.TV and was founded in 2011. Today it has more than 55 million active users monthly, according to the company. Twitch is also rolling out services that will flag copyrighted music in its video-on-demand archives.

This deal proves that Amazon is moving past being just a network of ecommerce properties with a fulfillment arm; it now operates hardware products including Fire TV, Kindle Fire tablets and Fire Phone. No longer is being the middleman distributor of other companies’ content good enough for Amazon. The company is striving to produce a greater amount of its own shows and games that will entice consumers to utilize its devices and premium membership service, which you know as Amazon Prime.

James McQuivey, analyst with Forrester Research stated, “If you are Amazon, you’ve suddenly filled the world with at least a few million of these tablets and the [Fire] TV and now the Fire Phone. You need to be able to deliver content to these devices in perpetuity. So what do you do? You start funding your own content…but at the same time you also look around and see who is generating millions of views already that you can buy. That’s where Twitch comes in. Twitch is probably a cheaper way to get content that you know will generate millions of viewing hours than to go out and make your own TV show.”

Image: Mashable

It’s obvious why this deal is beneficial to Amazon, it helps them expand their existing offerings and also helps them take their company to new heights. Twitch CEO Emmet Shear stated, “Amazon has the same deep, shared vision of where the games industry is going, and saw the same trends that we did. We saw a cultural fit between the two companies, and they saw what we were doing and wanted to help us do it faster. Acquisition was never a goal for Twitch, for us it’s very much been a focus on the customers first.”

Amazon makes a clear connection back to ecommerce with this deal. Twitch gives Amazon direct access to more than 50 million unique users and counting. These users are mostly young males and spend hours weekly watching other people play video games; making Twitch a prime demographic which advertisers covet and a powerful marketing tool for games and gaming product sales, via Amazon.

This deal will close in late 2014, Twitch said

See Twitch in action:

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Source: Mashable