Amazon snaps up live video startup Twitch, which shows gamers playing games
Amazon.com Inc snapped up live-streaming gaming network Twitch Interactive for about US$970 million(S$1.2 billion) in cash, reflecting Chief Executive Officer Jeff Bezos' resolve to transform Amazon into an Internet destination beyond its core retail operations.
The move is the largest deal in Amazon's 20-year history and will help the US e-commerce company vie with Apple Inc and Google Inc in the fast-growing world of online gaming, which accounts for more than 75 percent of all mobile app sales.
The acquisition involves some retention agreements that push the deal over US$1 billion, a source close to the deal told Reuters.
"Twitch will further push Amazon into the gaming community while also helping it with video and advertising," Macquarie Research analyst Ben Schachter said in a note.
Twitch's format, which lets viewers message players and each other during live play, is garnering interest as one of the fastest-growing segments of digital video streaming, which in turn is attracting more and more advertising dollars.
The deal is an unusual step for Amazon, which tends to build from within or make smaller acquisitions. Tech rival Google was earlier in talks to buy Twitch, which launched slightly more than three years ago.
Neither Amazon nor Twitch would discuss how the deal came together or comment on Google's interest.
The homepage of live-streaming gaming network Twitch Interactive. Photo: Reuters
In an interview, Twitch Chief Executive Officer Emmett Shear said the startup contacted Amazon because its deep pockets and ad sales expertise would allow the startup to pursue its strategic objectives more quickly.
"Having Twitch being a part of Amazon, would be a great idea for us (because) they would give us the resources to pursue these things that we honestly already want to pursue and they'd let us do it faster," Shear said.
15 billion minutes of content
Twitch raised $20 million in funding last September from game publisher Take-Two Interactive Software and firms such as Bessemer Venture Partners and Thrive Capital.
More than 55 million unique visitors viewed more than 15 billion minutes of content on Twitch in July.
Twitch and Amazon did not disclose details on new retail opportunities for Amazon through Twitch’s network of gamers.
"We have lots of ideas we've discussed, there's a lot of interest and a number of things we can pursue," Michael Frazzini, VP of Amazon Games, said in an interview. - Reuters