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Amazon Buying Twitch; Sorry, Google

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+.

  • lelutinbanni
    Ok
    Reply
  • Shneiky
    Thats good news. The less stuff Google and Facebook own - the better for us all. Monopoly never brings anything good.
    Reply
  • 10tacle
    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.
    Reply
  • Shneiky
    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.
    Reply
  • 10tacle
    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.
    Reply
  • WildBear247
    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.
    Reply
  • Shneiky
    @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.
    Reply
  • faisalkhan01
    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/
    Reply
  • baracubra
    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
    Reply
  • Shneiky
    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.
    Reply