I bet you didn’t see this one coming! For the past three months executives at Twitch, the web’s leading video-game streaming service, were supposedly engaged in high-value negotiations with YouTube’s parent company Google about a possible acquisition.
A few popular news websites even erroneously “confirmed” the deal was happening.
Now, without anyone noticing it seems Amazon has climbed into your windows and snatched your favorite streaming service up. Earlier today, both companies released statements confirming that the e-commerce giant has acquired Twitch in an all cash deal worth $970 million.
Speaking about the largest acquisition in their 20-year history, Amazon’s founder and CEO Jeff Bezos said: “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.”
In a separate statement, Twitch’s CEO Emmett Shear thanked the site’s loyal users for making the service what it is:
“Your talent, your passion, your dedication to gaming, your memes, your brilliance – these have made Twitch what it is today. Every day, we strive to live up to the standard set by you, the community… 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.”
This is the largest acquisition in Amazon’s 20-year history and it makes perfect sense. They’re already one of the largest video game retailers in the world, and they already own their own gaming studio (which started with their acquisition of Reflexive Entertainment in 2008, and took a huge leap forward after the company purchased game development house DoubleHelix earlier this year). Adding the most engaging online platform for gamers compliments everything else they’re doing perfectly.
Amazon also has a long history of investing heavily in Research and Development, and has never been shy about using acquisitions to speed up that process. From the significant cost of building their cloud offering Amazon Web Services (AWS), which is now the largest cloud service provider on the internet. To building Amazon Video using technology and content from the likes of UK streaming service provider LoveFilm. It will be interesting to see how Twitch will play into their future strategy.
Also, if Twitch moves their infrastructure over to Amazon’s AWS they’ll likely benefit from a dramatic drop in infrastructure costs; much like YouTube saw when they moved over to Google’s infrastructure.
Now, you may be wondering why Google backed off when the acquisition was, supposedly, a done-deal. We previously reported that Google was preparing for a legal challenge to the acquisition on antitrust grounds, which makes sense. According to data from video analytics company Qwilt, Twitch served 43.6% of all live-streamed internet traffic in April, 2014. The largest streaming service (with a significant presence in live-streaming…) purchasing the largest live-streaming video service is sure to raise a few eyebrows at the Justice Department. According to Forbes, Google and Twitch could not agree on the penalty Google will pay to Twitch if the deal is derailed by regulators, which gave Amazon the opportunity to throw their hat into the ring late in the game.
Now, for the first time in a long time, another company has taken something that Google, clearly, desperately wanted bt now cannot have.