In a move to add the functionality of live-streaming games to its already strong online offering, Google sealed a deal with Twitch costing close to $1 billion. The news comes days after completion of streaming Dota 2 – The International.
Not much more in terms of details is known about the deal, with SiliconBeat.com admitting, “We don’t know everything about this deal, such as when it will be announced and the exact purchase price.
“But we do know that Twitch investors who participated in past rounds are pleased that they will be getting significant returns that are multiple times the amount they originally invested.”
For those who don't know, Twitch is by far the largest live-streaming website in the United States. It's most popular product is esports, whose popularity has exploded with over 2.4 billion hours viewed through various services similar to Twitch. Twitch follows a user generated content model. Such sites normally require heavy moderation, but thankfully there are plenty of user generated content moderation services available.
Google's move to secure this gentle giant highlights the immeasurable and completely unknown value in Internet streaming. It is a strategic attempt to keep up with the voracious appetite of online gaming and its growing popularity as a spectator sport.
According to Silicon Beat, it has become "something that draws millions of viewers, can offer prize pools that surpass pro golf’s marquee events, and provides a multibillion dollar opportunity for advertisers."
Both Twitch and Google have declined to comment on the deal, which was first reported in the Drum and cited by unnamed sourced in Variety.
At that time, many speculated an all-cash offer with an imminent announcement.
In charge of this acquisition will be Google's YouTube group, which stands to gain the most benefit from this move.
Twitch, based out of San Francisco, is a platform allowing gamers to broadcast gaming sessions to online viewers from PCs, Xbox One or PlayStation 4.
Gamers become entertainers and overnight sensations and "can gain fleeting fame by entertaining those spectators, who sometimes number in the millions," says Venture Beat.
Twitch's popularity is best surmised by considering that 1.35 percent of all Internet traffic this past March pointed to Twitch, according to Sandvine.
With over 50 million active users per month and more than 1.1 million broadcasting members, it is easy to see why this deal is worth more than its weight in gold.