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Amazon purchases video game streaming service

Article By: ,  Financial Analyst
August 26, 2014 10:15 AM

Amazon has purchased video-game streaming service Twitch in a deal worth $970 million (£585 million).

In what has been described as a "surprising" move by Amazon, the deal will expand its presence within the gaming sector. It is an example of the firm broadening its horizons and branching out into other commercial areas. Twitch allows users to watch other people play video games and has been growing substantially in popularity.

Over the course of July, alone, Twitch reported 55 million unique visitors, many of whom watched through the Twitch.tv website. The site allow people to watch other players with the footage being interspersed with advertisements. Amazon has highlighted this medium as an ideal opportunity to increase revenues and further expand its service to another demographic of customer.

In recent years, Amazon has been adopting a new approach to its range of services. It has previously launched a one-day delivery service known as Prime, which people can sign up to for a subscription of $99 a year. The company also launched its own smartphone, the Fire, earlier in August putting it in direct competition with the likes of Apple, Google and Samsung.

Speaking about the purchase of Twitch, Jeff Bezos, Amazon chief executive officer, said in a statement: "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."

First launched in 2011, Twitch is the world's leading video platform and community for gamers. The San Francisco-based company boasts tens of millions of users every months connecting them to like-minded people around the globe on a daily basis. It allows people to view the very best gamers in the world while also hosting a range of events bringing together the gaming community.

In the past, Twitch has hosted community marathons to raise millions of dollars for charity while also being involved in video game industry where the latest innovation in gaming technology is developed.

Amazon saw its share price open 0.73 per cent up at 334.02 on Tuesday (August 26th).

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