Rumor in the street is that the purchase is worth more than $1 billion. What is Twitch and why did Google send its subsidiary YouTube to make the purchase? And why pay so much for a company in the first place?
The things become clearer the moment you find out a few details about Twitch.
Twitch is a video game streaming service which allows people to broadcast live gameplay footage from their PC or games consoles, together with audio commentary and webcam footage, and has become hugely popular with the online gaming community. At the end of 2013 the service had 45 million monthly users. The service makes money through video ads as well as through subscriptions, with the company saying that 300,000 of its users had a subscription to at least one channel.
According to Daniel Bean from Yahoo Tech,
Twitch is regarded to be the most popular service of its kind for gamers, with roughly 45 million unique visitors monthly. That’s up from 30 million unique visitors last year. In terms of bandwidth, Twitch’s traffic is higher than Hulu, Amazon, and Facebook. It’s mammoth, even if you’ve never heard of it.
So why does YouTube (and implicitly Google) need Twitch?
The equation is simple: add together one of the largest video – game live streaming sources with the largest video streaming source and you’ll see why Twitch is an important growth factor for both YouTube and Google. Ad revenue aside, Google is known for purchasing its competitors. Reports show that
in the area of live streaming in general, video gaming or otherwise, YouTube lags behind Twitch, which accounted for nearly 44 percent of all streaming traffic for a period this past April.
On the other hand, Twitch is said to have refused a previous offer from Microsoft, but embraced Google’s take-over proposal. Why sell yourself to Google? Commentators say that Twitch joins Google for the same reasons other companies did in the past: look at YouTube and at what Google managed to do with it. It is a unique opportunity for Twitch to benefit from everything YouTube and Google have to offer, technologically and popularity – wise. Analysts consider this deal as a remarkable win – win situation for both parties. So far, nobody from Twitch or YouTube confirmed the purchase, but we still have time to find out!