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It’s Official: Amazon Acquires Twitch for $970 Million

Months after multiple reports suggesting Google was closing in on a deal to acquire Twitch, Amazon has snuck in to steal away the burgeoning streaming service dedicated to watching videogamers play, the companies announced Monday.

The deal is for a reported $970 million in cash.

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

Back in May, Variety became the first among several reports in subsequent months citing sources suggesting Google was close to a deal of its own in a pact worth $1 billion.

The San Francisco-based company 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.

How exactly Google’s deal–all but done according to multiple sources months ago–vanished is unclear; a Google rep declined comment.  In June, the companies announced a deal for live broadcast alerts on YouTube.

There’s compelling logic behind Amazon acquiring Twitch, a fast-rising force in online video consumption with over 55 million users engaging in extended viewing of videogame plays. Twitch would give the company something it sorely lacks: an ad-supported content asset that users could access for free. Most of what Amazon offers in the way of video is either home video retail or its growing stockpile of original programming that is part of subscription VOD offering Amazon Prime.

Free video content could be the most freely available product Amazon could offer as a means of bolstering the value of its growing array of viewing devices, including Amazon Fire. Those devices, in turn, support Amazon’s core retail business by maximizing opportunities for transactions.

Twitch also makes sense as Amazon makes moves to be more of a presence in the videogame world. The $99 Fire TV device released earlier this year has gaming capabilities.

Like YouTube, Amazon could also be interested in extending Twitch’s expertise in live streaming to other genres of programming.

To date, Amazon has made only modest moves in ad-supported online video despite much speculation that it would enter the space and provide a sizable challenger to YouTube. Last month, Amazon unveiled a new Video Shorts section as a means of driving e-commerce and ad revenue.

Amazon even popped up recently as a potential buyer of a leading YouTube multichannel network, Stylehaul.

Twitch was started 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. Twitch shut down Justin.tv last month.  The company has 130 employees.

In a statement announcing the acquisition, Shear declared, “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.”

 

 

 

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