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Amazon Buying Twitch; Sorry, Google

By - Source: Tom's Hardware US | B 26 comments

Amazon announced on Monday that it has agreed to acquire the live video platform Twitch Interactive Inc. The news arrives after Twitch switched corporate names, moving from Justin.tv Inc. to Twitch Interactive, Inc. back in February 2014. Twitch then shut down Justin.tv earlier this month.

So why acquire Twitch? The press release says it all.

“In July, more than 55 million unique visitors viewed more than 15 billion minutes of content on Twitch produced by more than 1 million broadcasters, including individual gamers, pro players, publishers, developers, media outlets, conventions and stadium-filling e-sports organizations,” the press release said.

Twitch CEO Emmett Shear said that both Twitch and Amazon are “believers” in the future of gaming. He also indicated that Amazon will provide resources that will help Twitch grow even larger. Twitch will be able to create tools and services that wouldn’t have been possible had Twitch stood on its own two feet.

“This change will mean great things for our community, and will let us bring Twitch to even more people around the world,” he said.

According to the agreement, Amazon will shell out approximately $970 million in cash in exchange for all of the outstanding shares of Twitch. Both parties expect to seal the deal in the second half of 2014 should the customary closing conditions be favorable.

So what will Amazon do with Twitch? We’ve reached out for a response, but we’re betting the live streaming service will somehow be tied to Amazon’s game sales. For instance, if a gamer is watching a live feed of Battlefield 4, there could be a link directing the viewer to the product, such as “Buy Now.”

Previously, unnamed sources claimed that Google signed a deal to acquire Twitch for a meaty $1 billion. So why then did Twitch choose Amazon over Google/YouTube? According to Shear, it was because Amazon believed in the Twitch community.

“They share our values and long-term vision, and they want to help us get there faster,” Shear said in a thank you letter. “We’re keeping most everything the same: our office, our employees, our brand, and most importantly our independence. But with Amazon’s support we’ll have the resources to bring you an even better Twitch.”

Meanwhile, here’s what Amazon told Tom’s Hardware about the acquisition:

Amazon is highly invested in Games. We have a significant business selling video games, most game developers use AWS to build their game infrastructure, and we've continued to invest in improving the customer experience for gamers and game developers—developing original new games via Amazon Game Studios and releasing capabilities like Amazon Appstream and Amazon Cognito to remove even more heavy lifting from game development.

Twitch is another substantial step in this direction for Amazon. Twitch has fundamentally changed how games are consumed and interacted with, and it's a service that gamers and game broadcasters now find hard to live without. Playing video games started with single player gaming, then came multiplayer, now there’s Twitch. It's quite remarkable what Twitch has accomplished in such a short time, and we all believe this is just the beginning of what they will become over the long term.

As to the specifics, right now we’re focused on helping Twitch continue to do what they do best and grow their community. Beyond that, I’ll have to ask you to stay tuned.

Follow Kevin Parrish @exfileme. Follow us @tomshardware, on Facebook and on Google+.

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  • -1 Hide
    lelutinbanni , August 25, 2014 3:09 PM
    Ok
  • 6 Hide
    Shneiky , August 25, 2014 3:14 PM
    Thats good news. The less stuff Google and Facebook own - the better for us all. Monopoly never brings anything good.
  • 0 Hide
    10tacle , August 25, 2014 3:25 PM
    Amazon has some reasonably good leadership from the top down. Their sales of products and merchandise have decreased since many states have gone to taxing Amazon sales, which was a big incentive for many E-shoppers. One report shows that for online Amazon purchases of $300+, sales fell by nearly 25%. I'm a contributor to that, having spent over $2k over the past year either at E-tailers who still do not charge sales tax in other states (NewEgg, B&H Photo, Raktuen, etc.) or at traditional brick & mortar stores depending on cost. You don't always get the best deal online even with no sales tax compared to B&M's (Micro Center and their CPU/Motherboard bundle deals are a classic example).

    So it is good for them to have the forward vision and realize they need to diversify and expand. Many companies who were large and successful companies are in graveyards of history because their leadership was too arrogant and ignorant to accept changing market conditions and adapt. I mean that's business school 101 stuff right there that so many have failed to remember.
  • Add your comment Display all 26 comments.
  • -1 Hide
    Shneiky , August 25, 2014 3:47 PM
    Amazon overall sales did not suffer as much as you give credit to US taxation regulation. Remember, US is only a part of the world. Amazon fails in Europe, due to their slow shipping and bad coverage. There is even no Amazon in Belgium and The Netherlands among others, so if you order from there - you pay extra shipping. I do not know how their leadership fares, but on the lower levels of the company, the service they provide is having a hard time to compete with other on-line retailers. I do sometimes use Amazon, but most of the times, it is because I can't find the item I need anywhere else.
  • 0 Hide
    10tacle , August 25, 2014 3:59 PM
    Yeah I absolutely agree with Amazon's fail outside of America. They never invested in the supply chain and other support infrastructure to make it successful. With that said, everything needs to be kept into perspective. Amazon's foreign sales revenue to domestic sales ratio was $30 billion to $45 billion in 2013. Domestic US sales at Amazon still account for 60% of their entire sales, so a 25% hit on their big ticket items priced at $300+ will without question be noticeable to their bottom line.
  • 2 Hide
    WildBear247 , August 25, 2014 4:09 PM
    I'm a big fan of Amazon & their e-retail experience. However Amazon has disappointed me for a few years now. Their streaming media service began well but now is just okay (e.g. inability to download HD movies to non-Kindle devices, no Amazon Instant Video app for Android, etc.). Their decision to fork Android to create their custom mobile experience doesn't seem wise (why not augment the Android experience via apps & therefore still be able to tap into the full Android user base?). And their latest step into the mobile arena via the Fire phone hasn't helped their case. So now they're buying a new service? Let's hope that portion of the company sees better growth & development than the aforementioned areas.
  • 0 Hide
    Shneiky , August 25, 2014 4:27 PM
    @10tacle,

    What you are saying is completely correct. But if Amazon did provide more up-to-par service in Europe, the revenue would rise to a number higher than the US sales.
  • 0 Hide
    faisalkhan01 , August 25, 2014 4:52 PM
    You might want to have a look:

    Amazon to acquire twitch, giving a competition to its fellow rival Google
    http://geekthem.com/amazon-acquires-twitch-online-streaming-gaming-site/
  • 4 Hide
    baracubra , August 25, 2014 5:40 PM
    Quote:
    Amazon overall sales did not suffer as much as you give credit to US taxation regulation. Remember, US is only a part of the world. Amazon fails in Europe, due to their slow shipping and bad coverage. There is even no Amazon in Belgium and The Netherlands among others, so if you order from there - you pay extra shipping. I do not know how their leadership fares, but on the lower levels of the company, the service they provide is having a hard time to compete with other on-line retailers. I do sometimes use Amazon, but most of the times, it is because I can't find the item I need anywhere else.


    @10tacle @Shneiky

    What are you guys saying!?!!? Amazon is HUGE in Europe! They have 8 gigantic fulfillment centers in the UK alone, and another 12 in France and Germany.

    As for Netherlands and Belgium not being covered, that's total rubbish. I'm studying in Maastricht right now, and we get free 3-day shipping on all Amazon fulfilled orders above 20 euro from the German site. Same for Belgium, Denmark and Luxembourg. There's even a distribution center in Amsterdam... And up until 4 months ago, It was free shipping for orders from the UK as well...

    Just saying... know your stuff before you comment
  • 0 Hide
    Shneiky , August 25, 2014 5:46 PM
    Amazon does not have .nl and .be. And if you get something from the .de in 3 days - that is good. I live in NL and it usually takes a week from the UK or the French Amazon (my girl is French so she orders from there, where as I use English) and not to mention the cost for sending is twice or even three times higher. If we specifically talk hardware - I can order something today at noon and have it tomorrow morning at my door delivered for 2.95 EUR. Sounds way better than 15 pounds. The shortest Amazon delivery I ever had in NL was 4 days.

    And PS - Amazon is "HUGE" mostly in UK. 4 billion of the total Amazon revenue for 2013 is from UK alone.
  • 3 Hide
    Shin-san , August 25, 2014 6:54 PM
    I think this was a good choice. Amazon needs Twitch more than Google does. Amazon will more likely give Twitch more control
  • 0 Hide
    baracubra , August 25, 2014 9:25 PM
    @Shneiky

    True there's no .nl, but .de is just across the border..

    I ordered a room full of gear when I moved to NL for Uni (3 monitors, full tower computer hardware, speakers, amps, lights, disco ball, fog machine, printer, laser show, induction cook tops, kitchen items, about half a km of various cabling, bedding items - pretty much everything other than IKEA furniture) from Amazon.de and everything came with free shipping. Sunday orders were delivered usually by Wed or Thurs.... and prices are the best I could find... NL seems pretty well covered to me :\

    Anyway back on topic; There's a great livestream of an all-episode Half Life marathon right now by @dannyodwwyer from Gamespot. Gotta love twitch, hope it stays this way. But I feel much better about amazon buying them than Google or FB.
  • 2 Hide
    dirgle , August 26, 2014 12:51 AM
    I'm cautiously optimistic about this. The company has had some truly bright spots, and great potential. Unfortunately I have been less than impressed with the execution of most of their online services. Mainly around the software side and how it deals with the user experience. They always seem clunky, not terrible, just a step or two slower than the rest. Well see.
  • 3 Hide
    aule10 , August 26, 2014 1:35 AM
    Quote:
    Quote:
    Amazon overall sales did not suffer as much as you give credit to US taxation regulation. Remember, US is only a part of the world. Amazon fails in Europe, due to their slow shipping and bad coverage. There is even no Amazon in Belgium and The Netherlands among others, so if you order from there - you pay extra shipping. I do not know how their leadership fares, but on the lower levels of the company, the service they provide is having a hard time to compete with other on-line retailers. I do sometimes use Amazon, but most of the times, it is because I can't find the item I need anywhere else.


    @10tacle @Shneiky

    What are you guys saying!?!!? Amazon is HUGE in Europe! They have 8 gigantic fulfillment centers in the UK alone, and another 12 in France and Germany.

    As for Netherlands and Belgium not being covered, that's total rubbish. I'm studying in Maastricht right now, and we get free 3-day shipping on all Amazon fulfilled orders above 20 euro from the German site. Same for Belgium, Denmark and Luxembourg. There's even a distribution center in Amsterdam... And up until 4 months ago, It was free shipping for orders from the UK as well...

    Just saying... know your stuff before you comment


    More often than nought you cant send items from UK to other places in EU. EX. the kindle is only available to UK, if you try buy it in the UK amazone.

    The service outside the respektive country's where they have set up shops, is really horrible.
  • 0 Hide
    Shneiky , August 26, 2014 2:18 AM
    @aule10,
    I definitely agree.
  • 0 Hide
    shogunofharlom , August 26, 2014 3:29 AM
    I think this is a great move for both companies. With Google, Twitch would have just been another expendable platform. But Amazon sees the real potential behind twitch as an amazing means to make money which they will certainly invest in. I would welcome the ads to products as it should quiet the copyright nazis and strengthen the game development community. I think this is a win for everyone as it now provides a major competitor to youtube for the first time.
  • 0 Hide
    n3cw4rr10r , August 26, 2014 5:19 AM
    Competition is always good. Google acquiring might have been a disaster. On second thoughts, lets just wait and see what Amazon does with it.
  • 0 Hide
    ubercake , August 26, 2014 5:58 AM
    Good for Amazon. That's an extremely bold move. The opportunity to sell products while people are watching them in action is ideal.
  • 0 Hide
    Neve12ende12 , August 26, 2014 7:26 AM
    I think it would have made more sense to go with Microsoft. If I am watching twitch on my phone or computer or xbox...am I more likely to wait for it to be delivered in a week from Amazon or am I more likely to take 10 seconds and press the buy button on my xbox and in smartglass?
  • -1 Hide
    wardler , August 26, 2014 7:28 AM
    There seems to be a big misunderstanding in the comments about what a monopoly is.A monopoly is:
    Quote:
    the exclusive possession or control of the supply or trade in a commodity or service.

    Google does not have a monopoly. In fact, no where close. Being the best company, with the best products, with the best prices, does not mean you have a monopoly. It means you are a successful business. The government has done a fantastic job in educating the American people to be fearful of great companies.
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