Last week, on Aug. 25, the international electronic commerce company Amazon announced it would be purchasing the video game streaming website Twitch for $970 million. This dispelled any rumors that Google’s YouTube would be purchasing the site.
For those unfamiliar with Twitch.tv, it is a website where individuals can watch others play video games via live stream or stream their own gameplay. The site averages tens of thousands of viewers everyday. To give perspective, Twitch accounted for approximately 1.5 percent of all Internet traffic during March 2014. Forbes magazine called it, “the ESPN of gaming.”
Initially, I was quite leery of the idea of a giant corporation taking over something designed and intended for a public audience. When Google bought the video-sharing site YouTube, they began implementing several changes. They now run ads before almost every video is played, and users need to register for Google’s social media sit, Google+, to leave a comment.
Users were upset to see a site designed for them to have fun and view videos turned into a market-driven, ad-filled domain. The thought of comparable events happening to a site of similar style was troubling. However, Amazon has stated they are not making any changes to Twitch itself. The staff and the offices are staying as they are.
CEO of Twitch, Emmett Shear, issued a letter to the Twitch community as to why they made the deal with Amazon.
“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.” Shear said. “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.”
Rather than taking over the site — like Google taking over YouTube — it looks like Amazon is looking to empower Twitch and offer a global infrastructure.
So why did Amazon choose to invest so much money into a site that streams video games?
In my opinion, it shows Amazon believes in the future of video games and understands the passion of the gaming community. There is no doubt the gaming industry is growing at an exponential rate. Electronic Sports, also known as “esports,” are becoming a field out of which gamers can make a full-time profession.
Video games are growing into an extremely lucrative market. To give perspective, the grand prize for the 2013 DOTA 2 world championships was 1.43 million dollars.
Amazon purchasing Twitch after it established itself for three years and showed viable, exponential growth is an exceptional business decision. Now the Twitch community will have the backbone of a global company to support their global market. It is a win-win for both entities.
From a marketing viewpoint, it’s a brilliant business move. Two of Twitch’s top channels, League of Legends and DOTA 2, each brought in over 30 million viewers during their world championships. Advertisers will pay equally great sums to get slots they can use to target the massive audiences.
All in all, I look forward to seeing how Amazon helps support Twitch and what the future of gaming will look like with a strong global presence. I don’t think fans of Twitch should be worried about the purchase. If anything, it will take a site powered by the passion of tens of thousands of gamers and make it even greater.