Amazon Acquires Live Video Streaming Startup Twitch

Amazon, the retail giants acquires live-game streaming startup Twitch for $970 million in cash. The move, announced by the two companies on Monday, is the largest deal in Amazon’s 20-year history. There were some rumors that  Google has or was going to buy the video streaming startup for somewhere around a billion dollar. But with the Amazon acquisition, it makes more sense. The acquisition aims at fast-growing online gaming industry.

The acquisition involves some retention agreements that push the deal over $1 billion, a source close to the deal told Reuters.  Twitch, which lets viewers message players and each other during live play, is attracting many gamers and their fans and is emerging as one of the fastest-growing segments of digital video streaming, which in turn is attracting more and more advertising dollars.

With the Twitch acquisition, analysts suppose for deeper integration with product tie-ins it’s Amazon Instant Video and Amazon devices like the Kindle Fire tablet and recently launched Fire TV set-top box. 

More than 55 million unique visitors viewed more than 15 billion minutes of content on Twitch in July. Twitch raised $20 million in funding last September from game publisher Take-Two Interactive Software and firms such as Bessemer Venture Partners and Thrive Capital. Other venture backers include Alsop Louie Partners and Draper Associates.

Amazon is uniquely aims to grow Twitch into a profit-generating giant in online video. It can be on as many platforms as will accept it, sell content in a way that actually comes across as helpful and not intrusive, and leverage Twitch’s celebrities in ways that Twitch alone couldn’t. 

“The reason why we reached out to Amazon, the reason I thought working for Amazon, having Twitch being a part of Amazon, would be a great idea for us (because) they would give us the resources to pursue these things that we honestly already want to pursue and they’d let us do it faster,”  Twitch Chief Executive Officer Emmett Shear told in the interview with Reuters. 

“We have lots of ideas we’ve discussed, there’s a lot of interest and a number of things we can pursue,” Michael Frazzini, VP of Amazon Games, said in an interview. Twitch and Amazon did not disclose details on new retail opportunities for Amazon through Twitch’s network of gamers.

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