Amazon Takes Over Gaming Site Twitch in Nearly $1 Billion Deal: What Exactly is the Deal Here?

| Updated: Wednesday, August 27, 2014, 10:09 [IST]

This has been the age of acquisitions. From Facebook to Flipkart, all have hopped on to the bandwagon for greater margin of profits and other benefits. Amazon now becomes the latest one to join the list.

In a brand new deal struck, Amazon has agreed to acquire gaming-oriented site Twitch for a heft $1 billion. This is now official after a few reports in the past suggested Google was set to buy the site via its YouTube subsidiary.

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Amazon Now Owns Gaming Site Twitch in Nearly $1 Billion Deal

According to a new Wall Street Journal report, Amazon has agreed to a final deal that will see it acquire Twitch for $1 billion. This also follows an early report from The Information which stated that the deal could be announced soon, although a final date or price tag was yet to be mentioned.

As the final numbers stand, Amazon and Twitch have officially announced the new deal. The deal will now see Amazon purchase all outstanding shares of Twitch for roughly $970 million in cash. Apparently, the deal has also been approved by Twitch's shareholders and is set to be completed sometime later this year.

In a message addressed to the Twitch community, CEO Emmett Shear wrote, "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."

"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."

"I personally want to thank you, each and every member of the Twitch community, for what you've created. Thank you for putting your faith in us. Thank you for sticking with us through growing pains and stumbles. Thank you for bringing your very best to us and sharing it with the world."

"Thank you, from a group of gamers who never dreamed they'd get to help shape the face of the industry that we love so much. It's dangerous to go alone. On behalf of myself and everyone else at Twitch, thank you for coming with us," it adds.

But these are just the nitty gritties for the new deal. It's still a bit of a suprise that Amazon bought the site ahead of Google. Especially when Google has the backing of YouTube and all its video goodies. The whole wide world has only one question: What will Amazon do with Twitch under its wings?

As far as a bit of background check is concerned, Twitch was founded back in 2011. And although the site still waits to become one of the household names, it's clear that it's already a big name in the gaming fraternity. But why Twitch? Why now?

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A Huge User Base
If you have been a fellow gamer, you are no stranger to the concept of Twitch. There are more than 50 million followers of the site who everyday flood the site for all their gaming fixes. Either to hone their own skills, or show their support for their fellow gamers.

Over the past few months, the site has been provided massive boost by the likes of Sony and Microsoft by baking the service into their own latest gaming consoles -- PlayStation 4 and Xbox One -- where gamers can upload real time gameplay videos for others to take note of.

Maybe, just maybe, Amazon is only looking to tap into that user base and hoping for more users whenever they log into the Twitch site. But the finer details aren't really open.

More Areas of Expertize -- Probably Gaming
Amazon is looking to unfold. The company made its intentions open when it came out with its new '3D' handset. Apart from that, the company already has a name made for its Fire TV set top box and services such as Amazon Prime Video. But is it also heading into gaming? Well, the acquisition of Twitch could be considered a forerunner to that.

And since Twitch primarily offers access for the company to all the 'young' crowd out there, the deal might actually turn out to be one of the most potent ones in seeing Amazon's share sore than it usually does. It also comes ahead of the upcoming YouTube Live service that's still waiting for release.

We aren't in on the deal that much to discuss what all Amazon expects to gain from it, but by the looks of things, it seems like Amazon will now have a somewhat strongehold ahead of Google. Maybe, a bigger than YouTube presence is on the cards? Maybe not?