Winnipeg Free Press - PRINT EDITION

Amazon scratches itch for Twitch

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NEW YORK -- Amazon is hoping to become the ESPN of video games.

The e-commerce giant is buying streaming platform Twitch Interactive for $970 million in cash as it seeks to take part in video gaming's growth as an online spectator sport.

Twitch is a multi-channel online network built for a generation of people who not only enjoy playing video games, but find it entertaining to watch others who might impart tricks and tips for excelling at their favourite games.

Amazon's purchase is an acknowledgment gameplay video feeds are increasingly lucrative. Twitch had 55 million unique visitors in July, up from 20 million in 2012. Most visited the Twitch.tv website to watch other people play live or recorded games -- competitions interspersed with advertising. Digital video advertising in the U.S. is expected to reach US$5.96 billion this year, according to eMarketer, up 41.9 per cent from 2013.

"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," said Amazon CEO Jeff Bezos in a statement.

The deal is the latest example of Amazon expanding into new commercial arenas.

It introduced its own smartphone, the Fire, this month. Earlier this summer, it added same-day delivery, a set-top video streaming device to its list of services for members of Prime, its $99 annual loyalty program.

Amazon already has an in-house gaming studio that makes games, and its Fire TV set-top box was designed to attract gamers.

Twitch CEO Emmett Shear said Amazon is a good fit because "they believe in our community, they share our values and long-term vision."

Google had been in talks to buy Twitch, but no deal materialized. Forrester Research analyst James McQuivey believes Google might have been a better fit for Twitch.

"Twitch will be a harder asset for Amazon to use," he said. "It doesn't have the kind of video-streaming audience that Google's YouTube does."

However, McQuivey added Amazon is trying to own more of its own content rather than simply selling others' and Twitch could help the company do that.

"(Twitch) captures people's attention for hours a week and it also creates a product tie-in opportunity that Amazon can capitalize on in a way that Google could not," he said.

 

-- The Associated Press

Republished from the Winnipeg Free Press print edition August 26, 2014 B6

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