By now you've heard that online retail giant Amazon has entered into a deal to acquire Twitch, the popular game streaming service. According to the press release, Amazon is purchasing Twitch for nearly $970 million in cash. The sale is expected to be finalized in the second half of 2014.
"It's almost unbelievable that slightly more than 3 years ago, Twitch didn't exist," said Twitch CEO Emmett Shear in an open letter on Twitch. "Your talent, your passion, your dedication to gaming, your memes, your brilliance - these have made Twitch what it is today. Every day, we strive to live up to the standard set by you, the community. We want to create the very best place to share your gaming and life online, and that mission continues to guide us."
"Today, I'm pleased to announce we've been acquired by Amazon," Shear continued. "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."
"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," added Amazon CEO Jeff Bezos.
Previously, reports said that Google was looking to buy Twitch for around $1 billion. Someone was going to acquire Twitch, it was just a matter of who and when. You don't hit 45 million unique viewers per month who watch nearly 106 minutes of content per day without deep pockets taking notice. So now that we know who's shelling out the cash, what does this means for those who actually use Twitch on a regular basis?
Good news mostly.
A Google acquisition would've likely seen the company bringing YouTube and Twitch closer together. You could previously archive any Twitch stream to YouTube and recent changes have made that the only way to keep archived broadcasts. Google likely would've blurred the line between the two services and made users transfer their Twitch accounts over into Google accounts. It's not the end of the world, but many avid Twitch users would've resisted the change.
Amazon is a different type of company. It operates in many of its acquired companies in silos; the money flows back to a single source, but for the most part they operate independently. Zappos, Alexa, IMDB, Woot!, LoveFilm, and Comixology are all owned by Amazon. Of those, the latter ran into issues after its recent acquisition: Comixology changed its iOS app to no longer allow in-app purchases after Amazon took control. Like Amazon's Kindle app, iOS users have to navigate to a web site to make their purchases, which are then downloaded in the app. The Comixology and Kindle apps for Android retain the in-app purchases, leading many to believe the iOS changes were due to Amazon's desire to deny Apple its 30 percent cut on all app sales. Twitch doesn't operate on the business model, so that's not a problem here.
One doomsday scenario in the acquisition is Twitch moving its Android app off of the Google Play Store in favor of the Amazon Appstore for Android, but that's unlikely. Outside of a single instance - Amazon Instant Video - Amazon is keen to have its services as widely distributed as possible.
Amazon's acquisition of Twitch is all about eyeballs. In fact, Amazon is reportedly developing its own online advertising service to go up against Google's bread-and-butter service. The timing of that announcement and the Twitch acquisition dovetails quite well. Again, we return to those 45 million viewers; with the Twitch acquisition, Amazon has another platform to offer its own advertising service on. "If you want to reach the gaming demographic, we control the ad service on Twitch, so you want to place ads with us." That's an enticing sales pitch.
For Twitch, the benefit of being under Amazon is possibly better than an acquisition by Google. Network infrastructure is no longer an issue now that it has full access to Amazon Web Services. AWS powers major internet destinations, including Netflix, Reddit, Dropbox, and Ticketmaster. (Yes, this means when Amazon goes down, a large part of the internet goes down with it.) The Twitch archiving changes I mentioned earlier means Twitch's storage footprint is down and under Amazon users may actually see improved streaming service. In fact, Shear said as much in a Twitch Town Hall stream following the announcement.
"[Amazon] had a vision for us, to help us do what we're doing today, but faster," explained Shear. "We get to keep executing on the strategy that we have, but tapping into the resources that Amazon can bring to the table. I can't overestimate how much we think that working with Amazon is going to help us bring a better quality experience to our viewers faster."
The independent nature of Twitch under Amazon doesn't mean we won't see hooks between both services. I'd expect a "Buy on Amazon" button to appear in game streams at some point, and possibly a "See This Game on Twitch" on some Amazon game pages. Twitch already has an app on the Appstore for Android (and by extension the Kindle Fire line of devices), but that app will probably get better in the future. Currently, the app has issues with missing features and poor execution, but Twitch and Amazon working together will clean all that up.
The last big question is if Amazon's catch-all Prime membership will provide any benefits for Twitch service, perhaps offering Turbo perks to Prime subscribers. Judging by Prime's lack of connection with Amazon's other subsidiaries, I'm going to guess that's a no-go. Twitch will probably retain its existing subscriber and partner system instead of mucking up the works with additional Amazon accounts.
So, for the time being, Amazon's acquisition of Twitch seems to be a good thing for gamers. At the very least, the infrastructure surrounding Twitch will be improving. Will the company be reversing the recent changes with muting videos that include licensed music? Probably not, as those changes aren't a result of Amazon stepping in. In the Town Hall stream, Shear admitted that Amazon was as surprised by the audio recognition as everyone else is. As I said before, Twitch's star had simply risen too high to ignore the legal ramifications of licensed content. Sadly, that means the audio recognition is here to stay.
For anything else, we'll have to wait and see how this new partnership moves forward.
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