Why Amazon acquired the videogame streaming service Twitch for $1 billion

In a sudden twist of acquisitional-frenzy, the retail giant, Amazon, has just procured the video-game streaming service Twitch for a whopping $970 million. Founded in 2011, Twitch has become a worldwide phenomenon, surpassing over 55 million unique monthly visitors in month of July. For those unfamiliar, Twitch – formally known as Twitch.tv – is a live streaming video game platform that allows users to broadcast and view other people’s footage. The site has created a bit of a cult following, producing game playthroughs by users, e-sports broadcasts with commentary, on-demand content, and entire generation of surrogate big brothers and sisters.
 
Twitch gamers can upload videos or stream in real-time

“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 chief executive Jeff Bezos in a statement. 

It was speculated that Google’s YouTube would acquire the platform for a similar amount earlier this year after reportedly reaching late-stage acquisition talks; however, the rumored deal fell short, perhaps due to concerns that it would not gain approval from U.S. antitrust regulators.
 
Some streamers broadcast on a full-time basis, living off “donations” given by viewers

Part of Twitch’s dramatic growth can be attributed to the release of the PlayStation 4 and Xbox One, which integrated Twitch streaming capabilities into the console market, opening the service to gamer audiences outside of the PC domain. Mobile app integration further expanded the platform’s reach to produce the highest level of Internet traffic in the U.S. following Google, Apple, and Netflix. Twitch’s levels of engagement are also noteworthy, averaging about 100 minutes a day per user, and over 15 billion videos watched a month.

The all-cash deal is one of Amazon’s largest acquisitions to date and grants the company a giant foothold into a potentially untapped goldmine for advertisers to exploit; it’s not a position that’s too far removed from previous attempts at entering the streaming market with Amazon Prime’s movie and television show streaming.

Source BBC