Twitch (formerly Twitch.tv) is a video streaming site which has become one of the premier social platforms for gamers to share the experience of playing through games, and even to play them collaboratively as in the great Internet social experiment Twitch Plays Pokémon.
It’s one of the biggest sites you’ve probably never heard of, with 55 million monthly visitors. It accounts for 40% of all streaming traffic online, and during peak hours even has 2% of all internet traffic in the U.S. running through it – only Netflix, Google, and Apple account for more. All this is very impressive for a company which was only set up three years ago as an offshoot of Justin.tv, a site set up so that founder Justin Kan could broadcast his life 24/7 (‘lifecasting’).
And so, naturally, it has been snapped up by one of the web’s big players – in this case Amazon. This week the ecommerce giant announced that it was purchasing Twitch for $970 million cash.
The move is a little surprising considering that earlier this year Google-owned YouTube was reportedly in talks with the site for a similar amount. While the world’s foremost video-hosting site may have seemed a more natural choice to take over Twitch, there were allegedly anti-trust issues in play which tripped the deal up in its later stages.
Additionally, in a statement accompanying the announcement of the deal, Twitch CEO Emmett Shear stated that ‘Being part of Amazon will let us do even more for our community’. The implication, mirroring that reported by inside sources, seems to be that Twitch was offered more freedom under Amazon’s wing. It will remain independent, but backed by the deep pockets and international infrastructure of Jeff Bezo’s company.
It is this infrastructure and ready capital which will prove so important to Twitch. While the company was offered hundreds of millions of dollars in funding by venture capital investors, they felt that what they really needed was an established system of distribution which they could piggy-back on rather than undertake the onerous task of establishing a global network themselves.
Amazon is a perfect fit in this regard, and the licensing deals which it holds with many media companies means that negotiating the tricky copyright issues around the live broadcasting of games will be considerably easier.
The decision also makes sense for Amazon, who have been looking to move into game development for some time now with their Amazon Game Studio to round out the media development wing of the website. Their aggressive expansion into television production in particular could be a model for how they hope to crack the lucrative gaming market. Amazon are already the second-largest sellers of games behind Valve’s online Steam store, and by bringing Twitch into the fold they are buying the eyes of millions of gaming customers.
Twitch’s legions of loyal users probably won’t experience a huge shift after this deal, particularly considering Shear’s expression of intent to remain as independent as possible. It’s also very much in Amazon’s interests to let Twitch do what they do best, which is to build what is fast becoming the most popular social platform for gamers in history.