It’s Official: Amazon Is Buying Twitch For Almost A Billion DollarsFiled inside: News
Some time ago, the rumormill worked its magic and produced some evidence to support the thought that Google might purchase Twitch for a rather hefty sum of money.
In a rather sudden revelation Monday afternoon, it was instead confirmed that Amazon had scooped Twitch up instead, shelling out $970 million dollars for it—the most they’ve payed for an acquisition to date.
It makes plenty of sense: the CEOs of both companies have been meeting and apparently share similar visions for the industry, and can especially see the value in the streaming audience. Twitch is big, especially for a company that’s only about three years old—it accounted for 2% of peak internet traffic in February according to the Wall Street Journal. That’s fourth overall, behind Netflix (32%), Google (22%), and Apple (4.3%). Twitch accounted for more internet usage in February than Facebook did.
News is buzzing about this because a big company acquiring an up-an-coming one like this is always going to be news of some kind, but I feel like what’s being mentioned, and should instead be focused on, is what this is going to mean for the Twitch viewers and streamers out there. The service has come under some fire lately because they finally reached a size where many of the services they provided have to be dialed back (they used to archive all streams, that’s no longer a possibility), and they’ve had to crack down on the use of unlicensed music being played in streams, limiting the availability of VODs on their site.
While Twitch is in a mild state of flux over these things, the good news is that, according to Twitch CEO Emmett Shear, Amazon is making them a fully owned subsidiary. “We keep our office, we keep our culture, we keep our strategy,” Shear says, “But we get access to all of these products and resources Amazon has that’ll let us do that faster and better.”
That’s going to be the real draw for many in the Twitch community, I think. The service is great, but far from perfect: servers can be unreliable and make it impossible to stream regularly, and due to the very nature of the beast at times, you have people who might be viewing the stream on a healthy delay, sometimes up to thirty seconds or more. Reworking the infrastructure of the system to include more server redundancies and enhance the responsiveness of the stream on Twitch’s side will help the streamers to engage their viewers more easily and increase retention rates.
This also removes one of the barriers for entry for new streamers that find it difficult to keep viewers entertained due to the inability to maintain a regular stream or to engage their viewers in a “timely” manner (though it’s not the fault of the streamer in this case). I myself have had quite a few viewers enter the channel, say hello, and leave before my stream reflects the fact that I’ve greeted them in return. I don’t imagine the seeing the demise of the stream delay simply because Amazon is involved, but even cutting it in half will be a great boon to the community at large.
This could be a great service for gamers and the retailer alike, as I almost fully expect to see amazon links directly to products streamed with Twitch partners that direct the traffic that leads to those purchases seeing a percentage of the revenue generated this way. No one likes ads, but Twitch already has them, so I don’t see a lot changing on this front.
The buzz around various communities I’ve been seeing also hints that gamers want to see this partnership blossom into a competitor for the YouTube gaming scene, which has been notoriously harsh in levying judgments for things like copyright infractions and striking accounts in many situations that may not merit such charges.
This is also fitting very conveniently into Amazon’s apparent strategy to break into the gaming space in a bigger way, rather than content themselves with sitting on their laurels. They recently acquired a decent gaming studio, Double Helix games (Silent Hill: Homecoming), and they also rolled out the Fire TV to provide a console-esque device focused on gaming. The acquisition of Twitch is another step in Amazon’s plan to establish themselves as a component of the video game space in one way or another. While I can’t see them competing with major console manufacturers, they’re right about one thing, if anything, “I think it’s fairly safe to say at this point that on anything with a screen, games are the number one of two activity,” VP of Amazon Games Mike Frazzini says, “Obviously, if we’re going to be in the devices business, we have to be thinking hard about games.”
Twitch is already big, and its set to get bigger, thanks to Amazon’s intervention. Amazon is one of those businesses that seems to be on the cutting edge of enough spaces and innovating enough to inspire confidence in the deal, so I’m optimistic about what this means for us. Speaking of Twitch, remember that you can catch the Thumb Throne crew streaming nearly every day of the week over on our channel, so be sure to check that out and join us as we watch the service grow together.