When Julia Boorstin reported on CNBC that Amazon.com Inc (NASDAQ:AMZN) had scooped up Twitch, a global gaming platform, as a part of its growing family, much of the business community reported as being surprised. This was due to the fact that an announcement had been made in the month of May this year pertaining to Google Inc (NASDAQ:GOOGL) being in talks with Twitch for an acquisition worth $1 billion. Therefore, the current news of Amazon.com Inc (NASDAQ:AMZN) having bought the relatively infant gaming company for $970 million has certainly raised many eyebrows.
Whatever may have been Google Inc (NASDAQ:GOOGL)’s reason for not having closed the deal, for Amazon.com Inc (NASDAQ:AMZN), this move has major long term implications given the rapid growth that has marked the gaming sector. Although founded as recently as 2011, Twitch has grown in the last three years to boast of more than 55 million users in today’s gaming world and has been successful in generating sizeable revenue courtesy of subscriptions and active advertising. An added advantage is its capability of being able to perform live streaming of events which in itself accounts for substantial viewership even during peak hours.
On its part, Amazon.com Inc (NASDAQ:AMZN) has been on the look-out for making a foray into the gaming niche to tap into its huge and growing potential and this has rendered the deal a God-send for the online retail giant. As its CEO, Jeff Bezos puts it –
“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. 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.”
On his part, Twitch CEO Emmett Shear commented –
“Being part of Amazon will let us do even more for our community. We will be able to create tools and services faster than we could have independently,”
So far it appears to be a win-win situation for both companies wherein Amazon.com Inc (NASDAQ:AMZN) can now look forward to compete with Google Inc (NASDAQ:GOOGL)’s YouTube and Apple Inc (NASDAQ:AAPL)’s Netflix in FM trader Steve Grasso’s opinion. Twitch hopes to retain its culture and employees post-acquisition thanks to its parent company’s no-interference policy.
This article has been written by Vinita Basu.
“Google Inc (GOOGL), Microsoft Corporation (MSFT) and Apple Inc (AAPL) Facing New Rival in China”
