Late last night, it was reported that Amazon had bought video game streaming provider Twitch for a total of $970m (£585m) in cash, having beaten rivals Google and Yahoo to the punch.
The deal represents the biggest in Amazon’s history, according to Simply Business, ahead of the retail giant’s $928m buyout of Zappos in 2009. According to Geekwire’s analysis, Amazon is paying approximately $17.60 per Twitch user, compared to online shoe retailer Zappos’ $206 per user valuation.
Twitch confirmed it was keeping independent with little surface change, such as a change of brand or a hoovering up of employees. CEO Emmett Shear wrote in an open letter: “We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster.
“We’ve found new ways of connecting developers and publishers with their fans,” he added. “We’ve created a whole new kind of career that lets people make a living sharing their love of games.
“We’ve brought billions of hours of entertainment, laughter, joy, and the occasional ragequit.”
For Twitch, which started off life as the more general but similarly notorious Justin.tv, it represents a journey which comes full circle – and it also accelerates the growth and trajectory of the nascent e-sports genre.
Twitch’s usage figures are extraordinary by any reasonable standard. Back in April, the service accounted for more than 40% of US live video streaming traffic, with only WWE (17.7%) and UStream (10.9%) even threatening double figures. At its peak, only Google, Apple and Netflix are more popular Internet services.
This gives a huge indication as to the popularity of e-sports. It makes perfect sense – if 75,000 people turn up to Old Trafford to watch Manchester United every week, why can’t similar numbers do that with competitive video gaming?
It’s certainly a play Amazon is willing to bet on. But why else did Amazon shell out almost a billion dollars?
According to Seeking Alpha’s WestEnd511 blog, content is king. As Twitch relies so heavily on user-generated content, a lot of it would be exclusive, giving Amazon a major lift against the likes of Netflix and YouTube.
“I expect Amazon to gradually incorporate Twitch content into Amazon Prime and the Fire OS ecosystem to enhance its product offering,” the anonymous author wrote.
Will this sit well with the hardcore Twitch audience base? It’s not likely – so no surprise that keeping independence was paramount in CEO Shear’s mind.
“We want to create the very best place to share your gaming and life online, and that mission continues to guide us,” he wrote.
What do you make of this acquisition? Are you worried that Twitch will lose its charm after going corporate?
