YouTube to Acquire Videogame-Streaming Service Twitch for $1 Billion: Sources

Twitch to live stream game content

Deal would be biggest ever for Google-owned YouTube

Google’s YouTube has reached a preliminary deal to buy Twitch, a popular videogame-streaming company, for more than $1 billion, according to sources familiar with the pact.

The deal, in an all-cash offer, is expected to be announced imminently, sources said. If completed the acquisition would be the most significant in the history of YouTube, which Google acquired in 2006 for $1.65 billion. The impending acquisition comes after longtime Google ad exec Susan Wojcicki was named CEO of YouTube earlier this year.

Reps for YouTube and Twitch declined to comment.

SEE ALSO: Why Google Wants to Hitch Twitch and YouTube

San Francisco-based Twitch lets users upload and watch free, live gameplay videos that can be streamed from Microsoft Xbox One and Sony PlayStation 4 consoles, and also sells a $9 monthly ad-free subscription and subscriptions to individual channels for about $5 per month. The company claims to have more than 45 million monthly users, with more than 1 million members who upload videos each month. It also has deals to distribute shows from partners including CBS Interactive’s GameSpot, Joystiq and Destructoid.

YouTube is preparing for U.S. regulators to challenge the Twitch deal, according to sources. YouTube is far and away the No. 1 platform for Internet video, serving more than 6 billion hours of video per month to 1 billion users worldwide, and the company expects the Justice Department to take a hard look at whether buying Twitch raises anticompetitive issues in the online-video market.

Twitch was launched in June 2011 by Justin Kan and Emmett Shear, co-founders of Justin.tv, one of the first websites to host livestreaming user-generated video. Shear currently serves as CEO of Twitch.

Founded in 2011, the startup has raised about $35 million in funding. Investors include Bessemer Venture Partners, Alsop Louie Partners, WestSummit Capital, Take-Two Interactive Software, Thrive Capital and Draper Associates. Twitch Interactive, which includes Justin.tv, has about 130 employees.

SEE ALSO: Major League Gaming, Twitch Compete to Become the ESPN of Videogames

Gameplay videos already are a highly popular category on YouTube. Twitch also plays in the separate “e-sports” market covering live professional gaming competitions; others in that space include tournament organizer Major League Gaming, a New York-based company whose investors include Oak Investment Partners and Relativity Media CEO Ryan Kavanaugh.

In March 2014, Twitch represented 1.35% of all downstream bandwidth on North American fixed-access broadband networks — nearly triple from last fall, according to bandwidth-equipment company Sandvine.

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  1. Overgames says:

    Haha 1st April Fool ! … Whaaaaat?!! We are already in May?! What the *$?#&! is going on?!

  2. XJadynX says:

    If The U.S. Officials allow this purchase, then there is little hope for Twitch not becoming a live stream copy right house of bullshit.

  3. Russell says:

    Terrible, terrible news. Twitch had a good thing going and it’ll be over if it goes to YouTube… What a nightmare.

  4. Avery Suazo says:

    I think there should be an intervention for Cyber Law.
    In the non-virtual world, monopolizing a trade or industry is prohibited to try to maintain a competitive market.
    “United States antitrust law is a collection of federal and state government laws, which regulates the conduct and organization of business corporations, generally to promote fair competition for the benefit of consumers.” – Wiki
    Big oil companies back in the early days of America would get so big that they could literally control the market price of the oil that they were selling because they owned the majority of the consumer confidence. Everywhere you look is Google this, Google that. Hey, you don’t know something? “GOOGLE” IT
    With the exponential growth of the internet and its vast capabilities changing every day, who knows how big Google will be in 25 years; heck, even 5 years?
    Don’t get me wrong anybodywhocarestoreadthis, I’m all about capitalism and enterprise. If I had 5 grand to spend freely, I would do so much with it. But really, Google is just getting incredibly large. Being one of the most profitable grossing entity in the world, all of the best go to them: the best web developers, the best web designers, the best programmers. They come crawling from across the world to make Google stronger (or more like get a piece of that $28.5 billion net worth pie [Forbes 2014]). I mean they made “microsoft office” free by the formation of Google Drive. They don’t charge the user a damn penny. Think about it.
    While creating a virtually perfect UI, the most advanced mobile operating system to date, and an incredible amount of available resources for free, Google is taking the world by storm… and quite honestly, it’s frightening. I can only hope that Google hits some sort of limit before it turns into the modern day Skynet.

    • hitakashi says:

      That’s the problem, The US Anti-Trust isn’t enforced at all. Look at the TWC + Comcast. That should obviously be covered under Anti-Trust, but as always, they have enough money to make them ignore Anti-Trust laws.

      Unfortunately, IF this is true, This would probably pass right under Anti-Trust even without bribery. Google isn’t huge in the Live Streaming especially in the gaming part of it. So I assume they could easily get it approved.

      At least they might get rid of the Admin Team, Right guys? RIGHT?

    • What exactly would you do with 5 grand if you were able to spend it freely? You’re talking about billion dollar enterprises and somehow this came up. Was curious.

  5. hitakashi says:

    If this is true, Google, Why can’t you use that $1 billion to buy the FCCs votes for Net Neutrality? :|

  6. TonyPasterino says:

    literally killing e-sports BibleThump

  7. magmafrost says:

    DAMNIT! We thought we could escape the tyranny of YouTube with Twitch. For too long, Google has been screwing over people who makeYouTube content for a profession, and now they buy the only competitor!

  8. Ryan says:

    Google!? No more bandwidth limits hopefully!?

    • hitakashi says:

      What do you mean bandwidth limits? I can understand the up coming Net Neutrality murder and telecom data caps, but I don’t recall Twitch having bandwidth limits.

  9. Keepo says:

    Kappa= Grey Face (no space

  10. orionsaint says:

    This is great news! TWITCH is about blow up!

  11. kappa says:

    This is going to be the best thing ever! Kappa

  12. Foofsa says:

    I can already see it..
    “You must be a google+ member to use the chat”
    . ~.~ *face palms*

  13. BeaverCheez says:

    MLG is no competitor, they don’t even deliver the same service, in fact MLG USES twitch to stream their events. Hmmm, looks like more scratch the surface journalism from a halfwit reading from a press release. DO SOME ACTUAL FUCKING RESEARCH BEFORE YOU WRITE A STORY!

  14. Abdu_ says:

    I’m going to kill my self bye.

  15. Great article, and very interesting about the acquisition by YouTube, but I would like to add a note.

    The comment “San Francisco-based Twitch lets users upload and watch free, live gameplay videos that can be streamed from Microsoft Xbox and PlayStation 4 consoles.” is a little misleading and narrow considering most of the streaming still comes from PC streamers, as well as many other platforms. The PS4 and XB1 were only added when the consoles came out late last year.

  16. Kappa says:

    Kappa

  17. Puro says:

    Please no..
    This is just bad, I won’t use twitch any more.

  18. Pyeh says:

    320 blaze it fgt. Pyah.

  19. SvenOtto says:

    Dont Do this shit twitch u can reach more money if u dont soll IT… Please dont

  20. Larry says:

    Google may take our freedom, but they’ll never take… OUR KAPPA!

  21. motion says:

    But where’s the real source that they bought/are buying it? Only sources here are unimportant links.

  22. Joni says:

    NO! WE DON’T NEED THIS!

  23. Jonatan says:

    Rest in peace, Twitch! If this is true, I will cry myself to sleep every night.

  24. april fools’ plssssssssssssssssss u.u

  25. matt says:

    No deal or riot!

  26. We need to start a collection for 2 Billion. If YouTube buys Twitch, say good buy to monetization.

  27. Paramonov says:

    Maybe they will fix lagging europe servers…

  28. hey says:

    lirikThump

  29. busstoryplsty says:

    bus story please chunce

  30. Amilkez says:

    chinguen a su madre entonces ya no habrá eurotruck cumbiero?

  31. BEAST9854 says:

    Google, I kindly ask you to go fuck yourself. If this happens I’m pissed…PLEASE let this be a troll…

  32. SwiftRage

    Welp, looks like the Illuminati may have won this battle…BUT NOW THE WAR!!!

    #LongLiveTwitchTV
    #DownWithGoogle+
    #DownWithSkynet
    #DownWithTheIlluminati
    #WakeUpSheep

  33. sladuog says:

    [citation needed]

  34. Dongeroni says:

    FailFish

  35. Major League Gaming is no threat. They have had so many opportunities to become successful and they’ve failed every single time due to the egotistical CEO, Sundance DiGiovanni.

  36. michael says:

    please god no

  37. LIRIK says:

    yo bullshite

  38. Jacob says:

    I swear, if Google try’s to push this Google+ crap onto Twitch streamers, I’m gonna lose it.

  39. Marc says:

    I call Bullshit

  40. Lunisce says:

    RIP

  41. Google can blow big hairy elephant dick.

  42. Applesocks says:

    BibleThump

  43. TheNeo0z says:

    Hello copyright on twtich!

  44. MrBlurberries says:

    RIP Lirik I will miss.

  45. lirik says:

    Confirmed for fake.

  46. In before buffering gets even worse danBad

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