Live$treaming: Amazon Buying Twitch For $970 Million

By Alice O'Connor on August 26th, 2014 at 2:00 pm.

It's a logo.

Hey gang! Remember those rumours that Google planned to buy Twitch for a cool billion dollars? That’s not happening. The livestreaming service has been up for sale, though. Amazon announced yesterday that, all things going well, they’ll buy Twitch for $970 million in cash money. Being owned by Amazon is good for us users, Twitch say, because they’ll have the support to do new stuff faster.

The buyout would help explain Twitch’s unpleasant changes this month. It’s wiped huge archives of old video and started muting copyrighted audio in saved videos, cutting costs and getting legal ducks in a line. Investors tend to care more about that sort of thing than users do.

The deal isn’t quite settled yet, but the pair expect to sign, stamp, and seal everything later this year. The cascade of press releases and announcements also brings some new numbers on quite how popular Twitch is. “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,” Twitch claim. Gosh.

Twitch CEO Emmett Shear sez in a blog post:

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.

What happened to the Google rumours? The owner of YouTube buying this other big online video and streaming platform could have run afoul of antitrust laws and Google weren’t happy risking it, say a Forbes chap’s unnamed sources. Believe that if you will.

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50 Comments »

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  1. Jannakar says:

    Still don’t understand why Amazon would be interested, makes as much sense as the eBay/Skype deal a few years back. Have money, must spend?

    It does rather look like the shareholders/founders cashing out while the going is good and there is little genuine competition.

    • Janichsan says:

      Maybe they just wanted to spite Google.

    • Tukuturi says:

      I didn’t realize Twitch was publicly traded.

      • TillEulenspiegel says:

        Private companies have shareholders too, if that’s the bit you were referring to. Typically VCs, etc. Wikipedia indicates Twitch had $15-20m funding rounds in 2012 and 2013.

      • katinkabot says:

        You know how you hear stories of the 10th employee of Google/Facebook making millions(or billions) of dollars when the company goes public? That’s because they were paid in PRIVATE shares of the company when they were hired or were paid as part of a bonus. The shareholders the OP is referring are typically investors – people that have generally poured a few million into the company to help it start up and in return the investors hope to double/triple the investment via buyout or going public. The investors usually have a fairly strong hand in how it’s going to play out in the end.

        • frightlever says:

          People without whom Twitch wouldn’t have been able to keep afloat because no matter what they’re doing with ads I can’t believe it’s paying for all their running costs.

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            SuddenSight says:

            I don’t know. Between ads, subscriptions to their content providers, and premium accounts I would assume Twitch is at least close to breaking even.

    • gunny1993 says:

      To help them compete with Netflix

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      Crimsoneer says:

      Well, let me show you the ingredients to Amazon’s master plan:
      1) a video service, that competes with Netflix – Amazon Instant
      2) The Amazon Kindle gaming/video streaming device device
      3) A proprietary ecosystem – the Amazon appstore/video store, etc
      4) Amazon game studios, which they now have now they’ve bought Double Helix
      5) The world’s largest user video streaming service – Twitch, or whatever Amazon rebrands it as.

      All tied into Amazon’s storefront and app recommendation engine. All together it leads to a massive, consumer based store, using a whole lot of data to sell you shit. It’s a massive monopoly on video entertainment, in a way. Play Amazon games, watch Amazon videos, watch OTHER people playing games, listen to commentary. All tied in.

      • vlonk says:

        Amazon understands the power of user generated content. They have the swarm rate their products, recommend based on their past sales and searches your searches. That is some mighty algorithm know-how and user generated content NEEDS new filter systems and search algorithms to work.

        You heard of the Youtube scandals where Lets Players get paid under the counter for reviews? How about we bring this system out of the gutter into the honest business world and combine app-shop, content creators and commercials into one big plattform.

        Watch out Steam, you are only a shop with a workshop and some screenshot-sharing and a chat function – can you compete with a software powerhouse that combines easy-access content streaming with a shop and algorithm voodoo?

        • MacTheGeek says:

          Until Amazon completely revamps their digital storefront and makes their library function easier to use, they won’t threaten Steam’s dominance in the game market.

          If they did those things, then they could start on the hard part: creating a backend API that competes with Steamworks, and a complementary bit of tech to rival the Workshop.

          I have large libraries on both Amazon and Steam. Amazon has had some fantastic sales. But they have a long way to go if they want to go toe-to-toe with Steam.

          • Smoky_the_Bear says:

            Amazon’s digital downloads are essentially a Steam proxy anyway (or Origin/UPlay for EA/Ubisoft games), much the same as Green Man Gaming, Gamer’s Gate etc are. It does make you wonder though whether they are eyeing up a separate service of their own where they can make more than pennies on the dollar for every game they sell.
            Either way they are certainly going for increased visibility for their digital games sales with the Twitch acquisition, among the other possibilities that have been discussed above.

        • P.Funk says:

          Out of the gutter? hahahaha

          Are we to infer that the richer a corporation the greater the moral fiber?

          • vlonk says:

            A codification of standards must happen, be it copyright, be it advertisement. I trust the company with the big bank account on doing this swiftly and thoroughly for one simple reason: The competition always sues the cashcows not the flimsy startups.
            It is not moral highground I imply, it is the inevitable rules and laws of the big business world.

    • nrvsNRG says:

      Amazons frikkin huge and is expanding all over the place. Nuthin difficult to understand really.

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        Peptidix says:

        Amazon is also in trouble with their investors for not making much of a profit. And in conflict with content providers because they are trying to squeeze them. It could go either way.

    • djbriandamage says:

      “Click here to buy the game”

      • Smoky_the_Bear says:

        I’ll eat my hat if this isn’t the first change we see to twitch, Amazon link in the top right above the video or next to the game name in the description is almost certain.

  2. Rao Dao Zao says:

    “… they share our values and long-term vision…” except that long-term vision of storing your videos forever?

    • WiggumEsquilax says:

      “It’s wiped huge archives of old video and started muting copyrighted audio in saved videos, cutting costs and getting legal ducks in a line. Investors tend to care more about that sort of thing than users do.”

      No wonder Amazon’s paying $30 million less than Google would have. They’re only buying half of Twitch, with the other half being thrown away.

    • MaXimillion says:

      You can highlight anything you want archived and have it be stored forever. It just takes that tiny bit of extra effort, instead of automatically archiving every broadcast.

  3. Simon_Scott says:

    I suspect that rumours sprang up that someone was looking to buy Twitch, and people just assumed it was Google because that seems to be the way of it. But by all means let’s have rumours about why Google didn’t buy it like they were rumoured to be going to be.

    • trjp says:

      Acquisition like this aren’t about buying the software/service/technology – they’re about acquiring the userbase, maybe the smarter people and any patents they might have lying around.

      Google didn’t need the userbase because they already have most of them on Youtube anyway (they’d have more of them if they’d not done the stupid mandatory G+ thing with it)

      Amazon are apex predators who believe they can control entire markets but their last few forays haven’t been so successful (the Fire Phone is a bit of a comedy item in particular but their whole foray into Android SORRY FireOS hasn’t really been that great I suspect)

      Why they want a large gamer userbase is curious tho – if I were to bet money I’d suggest they might be taking aim at Steam – but they have a LOT of work to do to get there.

      • Simon_Scott says:

        That makes a lot of sense, though, especially if they’ve seen their own PC title sales dwindling. Hugely ambitious, as you say, but they’re an ambitious company.

      • Smoky_the_Bear says:

        They’ve launched a digital sales service for games in the last 12 months. At the moment it’s only Steam/Origin/Uplay keys but they are clearly trying to grow their service. I guess this does tie in to that, they will undoubtedly have links to their storepages visible throughout Twitch, the same way they have Amazon Prime links on individual IMDB pages.

  4. Horg says:

    The thing I like most about amazon, is that when i’ve bought things which are broken / crap or eventually brake, i’ve been able to get a full refund or replacement every time with no questions asked. I’m not sure they are going to be able to apply this principle to VoDs unless they figure out how to give me minutes of my life back.

    • s0nicfreak says:

      You just gotta subscribe to Amazon Life Prime Unlimited. For just $4999 a year you’ll get back any unsatisfactory minutes of your life in 2 business days.

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    FhnuZoag says:

    You know, I wonder if this universe got its wires crossed at some point. Things would make so much more sense if Amazon bought Oculous, while Facebook bought Twitch.

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      Rizlar says:

      True!

      • Horg says:

        Then we could have OculousPrime, which sounds like a badass transformer, and FaceTwitch, which…..erm, yeah.

        • frightlever says:

          If Facebook bought Twitch you’d have… Facebook and Twitch. Curiously they seem to be pretty good about keeping their high profile acquisitions as discrete businesses. It actually makes a lot of sense.

          Similarly Amazon bought Zappos and has kept them as a discrete brand. As is Comixology. Meanwhile Lovefilm doesn’t really exist anymore.

          Microsoft would have re-branded Twitch from top to bottom, made a major announcement about the future of the new Microsoft Streaming Studio, then fired everyone a week later.

          • DrGonzo says:

            Just like Skype! Oh no wait they didn’t do that at all.

          • LionsPhil says:

            I guess you haven’t had the mandatory Skype upgrade yet, then, that reskins it to look like Windows 8 regardless of platform (which has been the case since v6, admittedly), wants you to sign in with a Microsoft Account (although legacy Skype accounts are still an option), and wants to set your search engine and homepage to Bing and MSN when upgrading.

            Oh, and the new (mandatory) Linux version is crashtacular. Insert your own tinfoil-hat theories or accusations of incompetence to taste here.

  6. Canazza says:

    Hey! You’re watching this game on Twitch! Why not buy it from Amazon?

    What do you mean DOTA2 is free to play?

    • jon_hill987 says:

      An option to buy the music the streamer is playing in the background/between matches might be a better option for Amazon.

      • Smoky_the_Bear says:

        Finally a useful purpose for the content ID matching system that doesn’t just piss people off.

  7. suibhne says:

    It’ll be interesting to see how Amazon treats this acquisition, which will be the key clue to its long-term strategy. Some purchases get integrated tightly, while others (e.g. Zappos) remain spinning out there in autonomous orbit, with little overlap and even minimal data integration (from a user perspective).

    It’s possible Amazon doesn’t even know yet – or rather, hasn’t made a long-term strategic commitment yet. The company’s internal culture is entrepreneurial, experimental, and data-driven, and the Twitch pickup offers many opportunities to exercise those values in different directions before identifying the overarching play.

    • vlonk says:

      They could get along without a steam-alike and keep a tap on the user generated wonders of Twitch but a billion is a big number.

      I guess they will push the Twitch integration into gameclients in the industrie as deep and wide as they can and then have either a lean or a steam-alike client as a tie in to push people to their own shop and generate sales.

      They will seek to implement a way that allows you to buy a software depicted in the video on your screen with as few clicks as possible. Because impulse buys are the easiest buys to lose and they do not want to lose sales to the competition either.

      • frightlever says:

        Maybe make a push for something like Steamworks then? Hmm. Maybe.

  8. BlueTemplar says:

    “they share our values”
    The values of Amazon are “The customer is king” and “The employee is a worthless, easily replaceable cog”.
    Now, will “twitchers” be considered as customers or employees, hmm?

    • Skabooga says:

      Yeah, this does make me worry for the content generators of Twitch, given how Amazon treats its authors, publishers, and general employees.

      And one company which has yet to turn a profit buying another company that probably isn’t doing much profit-wise does seem to smack of over-valuation. But then again, I am a know hater, so perhaps more optimism is called for in this case.

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      Chaz says:

      Amazon has values?

    • Frank says:

      Yeah, that is an interesting question. They treat third-party sellers pretty equitably (against Amazon-fulfilled sellers), it seems. Hopefully they’ll be at least as open to streamers.

  9. Tekrunner says:

    “We’re keeping most everything the same: our office, our employees, our brand, and most importantly our independence.”

    At this point I’m not sure why CEO’s / PR people still bother with claiming that they will of course keep their independence when their company gets bought. I mean, are there really people who believe that Amazon just gave the previous owners a bunch of cash and then told the CEO “alright, just keep doing what you were doing but don’t forget to send us your quarterly reports!”.

    I feel offended every time this happens. It makes me want to stop using the related products / services, no matter what I think of the new parent company, because the people who write these statements are either 1) deluded or 2) lying knowingly.

    • HadToLogin says:

      Well, there’s always a chance they actually keep their independence for now, as Amazon for example only wants money/data/patents/whatever and getting inside might break it.

      But when they send their quarterly report with big “we lost another million”, that’s when independence ends…

  10. bleeters says:

    Well it’s reassuring to know they’re keeping most everything the same in the wake of their dramatic sweeping changes to their actual service, at least.

    • Frank says:

      Yeah, if Amazon stepped in and said “We got rid of the Twitch management team; so sorry about them”, I think it would have gone over better.

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    egg says:

    I read this morning an article (behind paywall, sorry) arguing that one possible motivation was Amazon’s desire to face Valve’s monopoly on PC gaming sales (which directly impacts Amazon as an ecommerce business). That made sense to me.

    Amazon focuses on media to drive revenue (see books as one of their best money making fronts) and have made acquisitions of products that further enhance their ability to monetize such media (think of Goodreads, Audible, Kindle…). So “entering” the game scenario through Twitch might make sense.

  12. Wang Tang says:

    “sez”? :/