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Amazon to acquire Twitch for nearly $1 billion

Brett Molina
USA TODAY
This undated publicity photo released by Microsoft/Twitch shows the streaming video service, Twitch, broadcasting the fighting game, ìKiller Instinct,î on Xbox One. Twitch will be coming to the Xbox One, as well as the PlayStation 4. By hitting the ìShareî button on the Dualshock 4 wireless controller, PS4 users will be able to broadcast their gameplay directly to Twitch.

Amazon on Monday said it will acquire Twitch, a video service aimed at gamers that allows them to broadcast their virtual exploits to others online.

Amazon will pay $970 million in cash for all outstanding Twitch shares. The deal closes during the second half of this year.

"Like Twitch, we obsess over customers and like to think differently," Amazon CEO Jeff Bezos said in a statement. "We look forward to learning from them and helping them move even faster to build new services for the gaming community."

Twitch's business has boomed in recent months, particularly with the arrival of Sony's PlayStation 4 and Microsoft's Xbox One video game consoles. The PS4 included Twitch broadcasting capability when it launched in November, while Xbox One added it last spring.

Twitch hosts more than 1 million broadcasters. In July, 55 million unique visitors watched more than 15 billion minutes of content.

"It is a very vibrant and growing game platform, and one that is really unique," said Gartner analyst Brian Blau.

In a letter to the Twitch community, CEO Emmett Shear said business will operate as usual. "We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster."

Amazon has been making a deeper push into the video games market. In February, the company scooped up Double Helix Games, the studio behind Xbox One brawler Killer Instinct. Earlier this month, Amazon struck a deal with game designer Dong Nguyen on a sequel to his hit mobile game Flappy Bird. The game Flappy Bird Family is exclusive to Amazon's Fire TV device.

"Gaming has been an interest of Amazon for some time," said Blau.

The video service has been the subject of acquisition rumors for several months. In July, Venturebeat reported Google was planning to acquire Twitch for $1 billion. YouTube has also been reported as a potential Twitch suitor.

The move also adds to Amazon's growing stable of original content. The company has already started creating original TV programming for its media service Amazon Prime, and Twitch adds one more piece of original video to its lineup.

"It's clear that Amazon will want to find more content that it can control," said Forrester analyst James McQuivey. "Twitch is a good fit this way because it captures people's attention for hours a week and it also creates a product tie-in opportunity that Amazon can capitalize on in a way that Google could not."

Details of the Twitch deal were originally reported by The Information and Wall Street Journal.

Follow Brett Molina on Twitter: @brettmolina23.

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