On Monday, August 25, 2014, Amazon announced it was buying Twitch for a reported $970 million in cash. Google had been widely expected to land the company.
Variety had been the first to report, back in May, that Google was close to a deal worth $1 billion. Other outlets followed with their own versions of the story, and TechCrunch noted that some of those reports were presented as confirmation. Google stayed silent. When Twitch changed its platform policies a few weeks earlier, plenty of commenters blamed Google’s influence. How the Google deal fell apart is unclear, Variety wrote, and a Google representative declined to comment. TechCrunch said its own sources had put the price at close to $1 billion before Amazon confirmed the final figure.
What Amazon bought
Twitch let people upload and watch free, live gameplay video, including streams from Xbox One and PlayStation 4 consoles. It earned money from a $9 monthly ad-free subscription and from subscriptions to individual channels at about $5 a month. More than 55 million users were watching long stretches of other people playing videogames, Variety said. The company had 130 employees.
Variety’s Andrew Wallenstein argued the fit was obvious. Twitch gave Amazon something it lacked: an ad-supported video service that people could use for free. Most of Amazon’s video was either home video retail or original programming behind the Prime subscription. Free video could also raise the value of Amazon’s growing line of viewing devices, such as the $99 Fire TV, which had gaming capabilities, and those devices in turn feed the retail business. Wallenstein also saw a chance to carry Twitch’s live-streaming skill over to other kinds of programming.
Jeff Bezos, Amazon’s chief executive, said in a statement: “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.”
Twitch’s side
Twitch was founded in June 2011 by Justin Kan and Emmett Shear, co-founders of Justin.tv, which Twitch shut down the month before the sale. In a letter to the community, Shear said it was almost unbelievable that Twitch hadn’t existed slightly more than three years earlier.
“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,” he wrote. He promised that the office, the employees, the brand and the company’s independence would stay as they were.
Sources
- It's Official: Amazon Acquires Twitch for $970 Million
- Amazon's Twitch Acquisition Is Official | TechCrunch
