Amazon to buy video game streaming platform Twitch

NEW YORK — Amazon is hoping to become the ESPN of video games.

The e-commerce giant is buying streaming platform Twitch Interactive for $970 million in cash as it seeks to take part in video gaming’s growth as an online spectator sport.

The deal is an acknowledgment that gameplay video feeds are becoming increasingly lucrative. Twitch had 55 million unique visitors in July, most of whom went to the Twitch.tv website to watch other people play games —competitions interspersed with advertising. Digital video advertising in the U.S. is expected to reach $5.96 billion this year, according to eMarketer, up 41.9 percent from 2013.

“Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month,” said Amazon CEO Jeff Bezos in a statement.

The deal is the latest example of Amazon expanding into new commercial arenas. It introduced its own smartphone, the Fire, this month. Earlier this summer, it added same-day delivery, a set-top video streaming device to its list of services for members of Prime, its $99 annual loyalty program.

Amazon already has an in-house gaming studio that makes games, and its Fire TV set top box was designed to attract gamers.

Twitch CEO Emmett Shear said Amazon is a good fit because “they believe in our community, they share our values and long-term vision.”

Google had been in talks to buy Twitch, but no deal materialized. Google declined to comment on Twitch’s sale to Amazon. Forrester Research analyst James McQuivey said Google might have been a better fit for Twitch.

“Twitch will be a harder asset for Amazon to use,” he said. “It doesn’t have the kind of video streaming audience that Google’s YouTube does.”

However, McQuivey added that Amazon is trying to own more of its own content rather than simply selling others’ and Twitch could help the company do that.

“(Twitch) captures people’s attention for hours a week and it also creates a product tie-in opportunity that Amazon can capitalize on in a way that Google could not,” he said.

Seattle-based Amazon’s purchase of Twitch is set to close in the second half of 2014.

Twitch launched in 2011 to focus on live video for gamers. In July, users viewed more than 155 billion minutes of content produced by more than 1 million broadcasters, ranging from individual gamers, pro players, video game publishers, developers and others. The company does not release revenue figures, but in September 2013 it received a $20 million investment from investors including software company Take-Two Interactive and venture capital firms Alsop Louie Partners and Bessemer Venture Partners.

More in Herald Business Journal

Snohomish County’s campaign to land the 797 takes off

Executive Dave Somers announced the formation of a task force to urge Boeing to build the plane here.

Costco rises as results display big-box retailer’s resiliency

Their model has worked in the face of heightened competition from online, brick-and-mortar peers.

A decade after the recession, pain and fear linger

No matter how good things are now, it’s impossible to forget how the collapse affected people.

Under cloud of ethics probes, Airbus CEO Enders to step down

He leaves in 2019 after 14 years. Meanwhile, aircraft division CEO Fabrice Bregier leaves in February.

Tax reform needs the public’s input on spending priorities

The GOP tax plan is a good idea, but the next step should give us a voice on how taxes are spent.

For modern women, 98-year-old rejection letters still sting

In a stark new video, female Boeing engineers break the silence about past inopportunity.

Commentary: GM, Boeing fight a war of words over Mars

Boeing is strongly signaling how crucial deep-space exploration is to its future.

$4.99 sandwich promotion irks some Subway business owners

Management insists that “most franchisees support the promotion.”

Drone’s ease piercing of NY ‘no-fly’ zone underscores risks

An Army Black Hawk helicopter suffered damage to one of its rotor blades, but was able to land safely.

Most Read