Amazon buys Twitch for $970 million

In a deal that seems a bit confusing at first look, Amazon has purchased Twitch for $970 million in cash.

The Information broke the story this morning of the online retailer making a play for the video game streaming site. Google had been rumored to interested in Twitch to bolster YouTube. In fact, it looked as if Google and Twitch had finalized a deal, but Amazon swooped in and purchased the company.

Twitch CEO Emmett Shear stated in a post about the acquisition:

Today, I’m pleased to announce we’ve been acquired by Amazon. We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster. 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.

According to The Wall Street Journal, the talks between Google and Twitch had cooled off before the acquisition could be finalized leaving Twitch open for an Amazon acquisition.

Twitch allows gamers to share a live feed of their gameplay. Its tight integration with YouTube made it a perfect fit for a Google acquisition. It currently has 55 million unique visitors a month watching content created by 1 million broadcasters.

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In a statement Amazon CEO, Jeff Bezos stated:

Like Twitch, we obsess over customers and like to think differently, and we look forward to learning from them and helping them move even faster to build new services for the gaming community.

Amazon’s acquisition of the service seems out of place for a company that’s been investing heavily in hardware in order to sell goods. Its recent gaming strategy has been around adding games to its streaming set-top box the Fire TV and getting developers to build games for the quirky Dynamic Perspective feature on the Amazon Fire Phone.

But what it lacks in gaming street cred, it make up for in technology capable of handling all those streams of video games thanks to AWS (Amazon Web Services). While Twitch will be independent of Amazon right now, it could be a huge revenue stream. If someone is watching a game and they enjoy it enough to purchase, they could do so with very little friction because the stream is attached to the online retailer. Let’s just call it Twitch to Buy.

It also helps jumpstart any live streaming ambitions Amazon may have for other topics. The technology and knowhow are there with Twitch, Amazon can just tweak it to their liking.

With the acquisition of Twitch, Amazon can now tap into a dedicated community of gamers itching to buy the latest games. With that in mind, Amazon’s acquisition isn’t confusing at all. It’s actually a smart play into a world that’s set to explode in popularity and with that demand, comes money.

Image credit: AFP/Getty