A surprising report by The Wall Street Journal Monday that video game broadcasting service Twitch was to be purchased by online mega-retailer Amazon was true. Both companies made it official later in the afternoon leaving most industry watchers surprised due to the belief that a purchase announcement by Google was seemingly imminent.
In a press release provided by Twitch, Amazon purchased the company for $970 million in cash. The broadcasting service's shareholders have already approved the deal.
The total value of the deal with $1.1 billion with the addition of retention bonuses according to Bloomberg,
So, what happened to the deal with Google? It simply fell through according to Bloomberg's sources. Twitch was introduced to other potential bidders during the Google deal discussions and that eventually led to the deal with Amazon.
The acquisition is the largest in the history of Amazon and puts it in direct competition with Google, which owns another popular gaming video destination in YouTube, for gamers. The retailer has made a push into gaming already with the Amazon FireTV and picking up small development studios to create games for its set-top box, Kindle Fire tablets, and Fire Phone.
Twitch currently has approximately 55 million monthly active users to watch and discuss broadcasters playing games as well as gaming tournaments for popular games like League of Legends, Dota 2, and more. The site was founded in 2011 as a spin-off from the now defunct Justin.tv and is currently features embedded broadcasting and viewing apps in Sony's Playstation 4 and Microsoft's Xbox One as well as various PC and mobile games.
"Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month – from The International, to breaking the world record for Mario, to gaming conferences like E3. And, amazingly, Twitch is only three years old," said Jeff Bezos, founder and CEO of Amazon.com. "Like Twitch, we obsess over customers and like to think differently, and we look forward to learning from them and helping them move even faster to build new services for the gaming community."
"Amazon and Twitch optimize for our customers first and are both believers in the future of gaming," said Twitch CEO Emmett Shear. "Being part of Amazon will let us do even more for our community. We will be able to create tools and services faster than we could have independently. This change will mean great things for our community, and will let us bring Twitch to even more people around the world."
Shear also shared the following thank you letter to the Twitch community.
We're pleased to announce that we've been acquired by @amazon. Here is a letter from our CEO: http://t.co/PEwrXm402n
— Twitch (@Twitch) August 25, 2014
Dear Twitch Community,What do you think of Amazon's purchase of Twitch? Is it better or worse than Amazon owning the service? Sound off in the comments below.
It's almost unbelievable that slightly more than 3 years ago, Twitch didn't exist. The moment we launched, we knew we had stumbled across something special. But what followed surprised us as much as anyone else, and the impact it's had on both the community and us has been truly profound.
Your talent, your passion, your dedication to gaming, your memes, your brilliance - these have made Twitch what it is today. Every day, we strive to live up to the standard set by you, the community. We want to create the very best place to share your gaming and life online, and that mission continues to guide us.
Together with you, we've found new ways of connecting developers and publishers with their fans. We've created a whole new kind of career that lets people make a living sharing their love of games. We've brought billions of hours of entertainment, laughter, joy and the occasional ragequit. I think we can all call that a pretty good start.
Today, I'm pleased to announce we've been acquired by Amazon. 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. We're keeping most everything the same: our office, our employees, our brand, and most importantly our independence. But with Amazon's support we'll have the resources to bring you an even better Twitch.
I personally want to thank you, each and every member of the Twitch community, for what you've created. Thank you for putting your faith in us. Thank you for sticking with us through growing pains and stumbles. Thank you for bringing your very best to us and sharing it with the world. Thank you, from a group of gamers who never dreamed they'd get to help shape the face of the industry that we love so much.
It's dangerous to go alone. On behalf of myself and everyone else at Twitch, thank you for coming with us.
Emmett Shear, CEO
[Image via Amazon and Twitch]