Amazon.com, Inc. (AMZN)’s Twitch Acquisition: Playing Smart or Risky?

0

Twitch is the leading video platform and community for gamers, who can both watch and broadcast their online or mobile experience. Amazon.com, Inc. (NASDAQ:AMZN) confirmed a price of $970 million for their new deal. A short interview on Bloomberg with Brian Wong, KIIP co-founder and CEO, and Bloomberg’s Cory Johnson delved into the pro’s of the decision.

Amazon, Twitch Interactive, is AMZN a good stock to buy, Ethan Kurzweil

Firstly, e-sports are showing a growing popularity and people, of whom mostly teenagers and young adults, follow up matches as if watching live sports.

“It’s almost unexplainable, I’m sure that there’s some type of psychological thing going on, but it is like watching sports. You see the plays happen, you want to be a part of it. I think another part of what makes it so appealing is that there is a new category of stars emerging from this […],” Brian Wong said.

Secondly, numbers seem to be in favor of the transaction. Twitch had 55 million active users with an average of 4.5 hours spent in July, and 60% of them dedicated about 20 hours every week watching online games. There are already many companies that saw potential investing in advertising during the matches, and lots of other firms sponsor teams to play. Consequently, the move made by Amazon.com, Inc. (NASDAQ:AMZN) displays some strategic skills.

Lastly, the people currently following up updates on Twitch are the interest of many advertising companies.

“[…] It’s not something that the mainstream media is caught onto, but it’s out there and it is happening, and besides, it’s happening to a demographic that is hard for advertisers to reach. That is men in their 20’s and 30’s that can be pursued through Twitch,” Cory Johnson said.

Wrapping all up, a big amount of money has been allocated for an acquisition that has big potential at its base. Everything that’s left is to wait and examine how Amazon.com, Inc. (NASDAQ:AMZN) is going to play its ace in the hand.

Disclosure: none

Suggested Articles:

How To Be A Hedge Fund Manager

Best Vocational Careers

Share.