Wall Street Journal has reported that Amazon.com, Inc. (NASDAQ:AMZN) has agreed to buy Twitch, a live-streaming gaming network for $1 billion. Previously, the reports were swirling around that Google Inc (NASDAQ:GOOGL) was interested in buying Twitch.tv in order to expand its streaming and entertainment business. Twitch service live streams video game footages to 45 million viewers a month. It has recently taken strong actions against copyright violations and revamped its services in order to refine its image. These efforts were likely to attract a buyer and apparently, Twitch is pretty successful in its efforts.
WSJ quoted “two people briefed on the matter” and said that Amazon.com, Inc. (NASDAQ:AMZN) will officially announce this deal as soon as Monday. Amazon.com, Inc. (NASDAQ:AMZN) has been weighing its options in the streaming business amid the outburst of huge opportunities in live tv, streaming and video content industry. Twitch will help Amazon tackle its streaming rivals like Netflix, Inc. (NASDAQ:NFLX) and Google Inc (NASDAQ:GOOGL)’s Youtube. According to DeepField cited by WSJ, Twitch acounted for around 2% of peak U.S. Internet traffic in February this year, which depicts its popularity in the video streaming domain.
Amazon.com, Inc. (NASDAQ:AMZN) has recently increased its staff in its studios in Seattle and Southern California. The company also introduced many new video games to its Fire TV set-top box. Twitch has dedicated apps for Amazon’s set-top box, PS4 and Xbox. According to WSJ, Twitch raised $20 million from many investors, including Bessemer Venture Partners, Thrive Capital and videogame-maker Take-Two Interactive Software, Inc. (NASDAQ:TTWO) and the company’s main source of revenue is its subscription model and ads.
WSJ said that Amazon.com, Inc. (NASDAQ:AMZN) and Twitch refused to comment on this deal.
Ken Fisher of Fisher Asset Management is one of the largest shareholders of Amazon.com, Inc. (NASDAQ:AMZN), having 2.5 million shares of the company so far.