Let the gaming begin? Another Amazon vs. Google fairytale


A bit more than three weeks ago Amazon closed the $970 million deal to acquire the video game streaming platform Twitch.Amazon1

Twitch is the largest live-streaming website in the United States which lets users record and show their own gaming experiences, as well as chat with other players. Lately, the platform has also expanded into non-gaming ventures, like streaming concerts. With more than 55 million monthly active users Twitch has raised $35 million since debuting in 2011.

Sounds nice. But why would Amazon envelop a game-streaming network?

One reason could be just to annoy its big search competitor Google. The Mountain View company was in acquisition talks with Twitch in May but failed to close the deal due to concerns for potential antitrust issues. Sounds familiar? Well, in this case Google itself called the acquisition off. By already owning Youtube, the world’s most-visited content streaming site and competitor of Twitch in broadcasting and streaming live or on-demand video game sessions, Google supposedly had difficulties consenting on a potential breakup fee with Twitch in case the deal did not go through with antitrust regulations.

Why else if not only to irritate a competitor could Amazon be interested in Twitch?

There is various speculation going on in the market. One rumor is that Amazon´s interest goes far beyond gaming andAmazon2 possibly into streaming of other activities. According to that, by performing the acquisition the company is investing rather in internet infrastructure than in gaming media because what Twitch has built up is essentially a video-based community that could feature any activity. Another guesswork states that Amazon might primarily be interested in the advertising power inherent in Twitch´s community. The average Twitch user is between 18 and 49 years of age and plays about 106 minutes a day – this represents a highly captive audience for ads and other content.

These are only some conjectures about the plans Amazon could have in mind with its envelopment strategy. What do you think the shopping platform will do with the freshly acquired online-streaming community? Build a second Youtube, dive deeper into the game scene or create something entirely new?

Sources:

http://www.gamespot.com/articles/amazon-completes-twitch-purchase/1100-6422606/
http://www.geekwire.com/2014/amazon-completes-acquisition-twitch/
http://www.forbes.com/sites/ryanmac/2014/08/25/amazon-pounces-on-twitch-after-google-balks-due-to-antitrust-concerns/
http://www.computerworld.com/article/2826673/google-considers-amazon-as-its-biggest-search-competitor.html

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2 responses to “Let the gaming begin? Another Amazon vs. Google fairytale”

  1. alepietrobon says :

    I think Amazon just really needed to get into the gaming market, it is consistent as you mention as a platform envelopment attack.

    In particular, probably Jeff Bezos wanted to get into gaming and can offer Twitch the infrastructure and licensing it needs to grow globally. Amazon already sells pretty much everything under the sun, so it only makes sense for them to add games to the books, films, and TV shows.

    The real question, in my opinion, is why would Twitch choose Amazon over Google? They have been in negotiations with Big-G and were already collaborating on YouTube. What could Amazon offer that Google could not?

    http://www.theverge.com/2014/8/25/6066509/why-it-makes-sense-for-amazon-to-buy-twitch

  2. 343021rb says :

    At first sight, it might seem like a strange move on Amazon’s part, but I believe there are actually some very good reasons for Amazon to aqcuire Twitch when looking at the bigger picture.

    We all know Amazon as being one of the biggest online retailers and central places to buy physical goods. However, some (recent) changes and new introductions seem to point towards a change; Amazon will attempt to become a more wholesome, ubiquitous force. To become the consumer’s main choice not only for tangible products, but for experiences as well.This becomes even more evident when looking at the previous products marketed by Amazon such as the Kindle, and the Echo yesterday.

    Lastly, when considering that the mission statement of Amazon is to be Earth’s most customer-centric company where people can find and discover anything they want to buy online, I think it is a great move on their part.

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