Twitch could become a $ 20 billion company inside Amazon

In 2014, Amazon surprised many people by buying Twitch. Today, Facebook, Google and others have the advantage of owning live video.

Subscribe Friday is our attempt to put news into context. Once a week, we’ll call out a recent headline, provide updates and explain why it’s important.In 2015, Twitch viewers watched live streaming videos worth more than 459,000 years, mainly from video game players. That number amounts to 5,800 the average American life time spent on social interactions around the game. Outsiders, including many members of the press, have struggled to understand how entertaining gamers’ games can be. So when Amazon tapped streaming site Twitch two years ago, the response wasn’t all that positive. However, it turned out to be a major step for the e-commerce giant, placing it in a foothold as live streaming becomes ubiquitous both inside and outside the gaming world. Since then, gaming as an audience sport only continued to grow. This year, the number of people who regularly watch online gaming videos will likely exceed half a billion, according to market research firm. Newzoo.

(Bloomberg / Getty Images) When Amazon first phoned, Twitch was the undisputed king in its segment. For the next two dozen months, the rest of Big Tech have placed their own bets on live video and especially playing live-stream games. Most notably, Google’s YouTube and Facebook Live are now making their way into the live-streaming game market.

Twitch, meanwhile, is expanding beyond the game. What may have been viewed by some observers as an expensive ad for Amazon has since emerged as an essential battlefield on which the tech giants reigned arousing attention. we mean.

All may have turned out very differently. Two years ago, Twitch seems very close to joining YouTube’s empire The Company Formerly known as Google. YouTube is in talks to buy Twitch under a rumored deal worth about $ 1 billion, according to an August 2014 Diversity news story. The deal makes perfect sense on paper: Twitch’s live stream audience and a focus on live professional gaming events will natively combine YouTube’s on-demand video platform, which has bounced back. Multi-channel service focusing on popular game.

PJ McNealy, CEO and founder of Digital World Research, a research and consulting firm focused on tracking young consumer behaviors, said: “YouTube / Google will be one Great alliance and synergy because so many Twitch broadcasters have YouTube channels. But YouTube and Twitch failed to reach a deal, and the door was left open for Amazon to execute a $ 970 million cash deal to buy Twitch.

With more than 55 million unique visitors and 1 million live streamers, Twitch’s appeal is undeniable, even if Amazon appears to be a non-buying. But can it extend beyond the tough gamer audience?

Since the 2014 acquisitionTwitch has come close to doubling its monthly visitors and has significantly expanded its live streams. It currently has over 100 million unique visitors and over 1.7 million streamer per month.

Twitch live streams still have a much smaller audience than YouTube videos, according to the company Newzoo. But Twitch viewers stick around longer – seven hours per month on average than less than five for YouTube – and they’re more active, posting chat messages and questions to their favorite streamers. they, buy animated “cheer” icons to show up in Twitch chat, and even donate money to Twitch characters as a way to thank them during their live broadcasts.

The active engagement of Twitch viewers can often help increase revenue for games that demonstrate popularity in live streams. Twitch data scientists have attributed as much as 25% of certain game sales to increase visibility through live streams. Pieter van den Heuvel, eSports Team Leader at Newzoo, says the most ardent Twitch viewers, who watch daily live streams, are also the ones who spend the most on games.

Amazon has taken a number of moves to capitalize on Twitch’s dedicated audience to support other Amazon products and services. In February 2016, Amazon launched a free game engine called Wood Workshop allows developers to create new video games with built-in Twitch integration for easier connection with gamers. For the first time ever, Amazon also plans to stream Pilot episodes of three original shows on Twitch for 24 hours on August 31 – could be an attempt to get Twitch viewers to the Amazon Prime Video subscription service.

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