SBD/August 26, 2014/Media

Amazon Pays Nearly $1B For Twitch, A Videogame-Focused Online Video Channel

Twitch ranks behind only Netflix, Google and Apple in U.S. Internet traffic
As videogames "become a spectator sport, Amazon just bought the world's largest arena" in the industry with its acquisition of Twitch Interactive, a "popular Internet video channel for broadcasting, and watching, people play videogames," according to MacMillan & Bensinger of the WALL STREET JOURNAL. The $970M purchase price "underscores the popularity of online gaming." Twitch, founded in '11, is "the fourth-largest source of U.S. Internet traffic," behind only Netflix, Google and Apple. It "owns technology for streaming live video capable of supporting a large number of simultaneous viewers for events like game tournaments and music concerts." Amazon has "been making a push into gaming, including bulking up its staff of programmers at its studios in Seattle and Southern California." Twitch will "operate as an independent subsidiary of Amazon" (WALL STREET JOURNAL, 8/26). USA TODAY's Brett Molina notes the acquisition "adds to Amazon's growing stable of original content." The company "has already started creating original TV programming for its media service Amazon Prime, and Twitch adds one more piece of original video to its lineup." Forrester Research Group VP James McQuivey said, "It's clear that Amazon will want to find more content that it can control" (USA TODAY, 8/26). RECODE.net's Kafka & Johnson cited a source as saying that Google "had been in talks" to acquire Twitch, but "that deal died." One big question whether Amazon will "let Twitch operate as a standalone business as Facebook did with Instagram," or if the company will "try to integrate it into its current video business" (RECODE.net, 8/25).
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