August 25, 2014, 4:35 PM

Amazon buys video game streaming company Twitch

In its second-largest acquisition, Amazon buys the company for $970 million.

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E-retailing giant Amazon Inc. announced today it has reached a deal to purchase video game streaming company Twitch for $970 million.

Twitch launched in 2011, focusing on streaming live feeds of people playing online video games. In July 2014, more than 55 million unique visitors viewed more than 15 billion minutes of content on Twitch. That content was produced by more than 1 million broadcasters, including gamers, publishers, developers and media outlets. Twitch makes money from advertising and subscriber fees.

“Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month—from The International, to breaking the world record for Mario, to gaming conferences like E3,” says Jeff Bezos, founder and CEO of Amazon. “And, amazingly, Twitch is only three years old. 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.”

The deal has been approved by Twitch’s board and is expected to close in the second half of 2014. The sale represents the second-largest acquisition for Amazon: The e-retailer paid $1.2 billion for online shoe e-retailer Zappos in 2009 and $775 million for robotics company Kiva Systems in 2012.

Buying Twitch is the third content-creation company Amazon, No. 1 in Internet Retailer’s Top 500 Guide has purchased in the past three years. In 2013, Amazon bought Goodreads, a book recommendation web site for an undisclosed price. Earlier this year, Amazon bought comiXology, an e-retailer of digital editions of comic books.

Forrester analyst James McQuivey says how Amazon might integrate gaming merchandise and game-related products into the Twitch experience will be something to watch. “Rather than creating an advertising empire on the back of Twitch, Amazon would have a greater interest in trying to sell products that the target audience is already clearly into,” he says.

 

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