Twitch’s Emmett Shear and Kevin Lin have plenty of reasons to smile today.
Update: Twitch has confirmed that Amazon has purchased it, though the company declined to include a price in its public notes. Google, we now know, lost.
Update 2: Amazon, confirming the news itself, pegged the price of the deal at ~$970 million in cash. According to the company’s most recent quarterly report, it had around $5.06 billion in cash and equivalents at the end of the period. Amazon therefore will spend around 20 percent of its cash on the deal.
Amazon, not Google, will be the corporate host of Twitch, the popular game-streaming service. The deal, which was first reported by The Information and confirmed by our sources, will likely be announced today. The final price tag will top $1 billion we’ve heard.
Google was widely expected to purchase the firm for around $1 billion and that deal was generally thought to be sewn up. That Amazon managed to pull off the deal is notable. We’ve also heard that Twitch had many suitors and that the Google deal fell through because Google’s offer undervalued the company.
Why Google would want the still-young media company is simple: Twitch has a large, growing reach into the young male demographic and is king in a growing content varietal. Google, which also owns the YouTube video property, wants to provide advertisers with a full audience set, and Twitch would strengthen its demographic mix.
Amazon, meanwhile, is a less obvious buyer. The company has invested in growing its content lineup, and its Prime service does provide customers with access to on-demand video, but Twitch, which provides free content to all comers, integrates less precisely than it would with Google.
Amazon would certainly benefit from the audience bump and could stream Twitch content to its device set, but the potential synergies are slightly dry beyond that. That Twitch deals with video game content is a secondary concern — don’t sweat the videos; focus on the audience.
Twitch eventually consumed its parent company, and progenitor, Justin.tv.
Where Twitch lands will determine which platform company has a lock on the gaming set. That’s something that could be leveraged into a gaming boost, but it’s worth considering that as Twitch handles multi-platform content, no single gaming-adjacent firm such as Google, Microsoft, or Amazon could turn the service to only bear upon their own services.
Previously, Twitch raised $35 million across several rounds from Bessemer Venture Partners, Alsop Louie Partners, WestSummit Capital, Take-Two Interactive Software, Draper Associates and Thrive Capital.