Analysis

Amazon gazumps Google to buy gaming video service Twitch


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Amazon-logoThe dictionary definition of “gazump” is “to make a higher offer for a house than someone whose offer has already been accepted by the seller, and thus succeed in acquiring the property”.

Strictly speaking, it may not be the correct term to use for Amazon’s announcement yesterday that it’s buying video streaming service Twitch: not only has Amazon whisked the company out from under Google’s nose, but it’s paying less than the $1bn sum that Google was expected to pay for the company. Admittedly, only $30m less – the official price is $970m – but it’s still a big surprise.

We’ve written about Twitch several times recently: its focus is streaming live video of games, from people showing off their Call of Duty or Minecraft skills to professional “e-sports” tournaments, and games industry conferences.

However, Twitch has been working with several artists on livestreamed music events, while trying to figure out a sensible policy for music copyright infringement in its 15bn minutes of archived videos. That, plus the rumoured billion-dollar deal to bring it under Google and YouTube’s wing, have put it firmly on the music industry’s radar.

Now, it’s taking its 55m monthly unique viewers and 1m broadcasters to Amazon. “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,” said Amazon CEO Jeff Bezos.

“We will be able to create tools and services faster than we could have independently,” added Twitch CEO Emmett Shear of the deal, which is expected to close by the end of this year. Games are still the focus, then, but with Amazon already expanding the musical elements of its Prime Instant Video service, there may well be chances for more crossover.

The deal is almost as interesting for what it says about the wider currents in and around the technology industry. Forbes suggests that Google didn’t seal the deal with Twitch due to “potential antitrust issues” – and specifically “the size of a potential breakup fee in case the deal did not go through”. Maybe something to think about in the context of the occasional ‘Google to buy Spotify’ rumours?

Google has been knocked back in high-profile acquisitions before – Groupon and Snapchat being the two obvious recent examples – but the confident media coverage in July that a Google/Twitch deal was imminent is now being cited as an embarrassment for the former company.

Perhaps, although you might argue that it’s as embarrassing for the media outlets behind those confident claims, including the ones now rapidly reverse-ferreting to explain why Amazon is a more logical suitor.

Stuart Dredge

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