Gamers and online video watchers alike were surprised last night by the sudden announcement that e-commerce giant Amazon had acquired game streaming platform Twitch. The deal seemingly came out of nowhere as most analysts, ourselves included, had noted Twitch’s increasingly cozy relationship with YouTube. Both companies had remained adamantly silent about any potential deal, but the close collaboration between the two video providers seemed to paint a clear picture.
Twitch was the first to confirm the deal via a blog post from CEO Emmett Shear. Shear’s open letter to the Twitch community was followed up by a formal statement released by Amazon outlining the terms of the deal. The price tag for Twitch was set at $970 million, a figure that is roughly in the neighborhood of the $1 billion that Google and YouTube were rumored to be laying down. Setting aside the massive payday for Twitch and its founders, why would the company suddenly pivot from a close relationship with YouTube into the arms of Amazon? There are a few important possibilities.
– The structure and timing of the deal may simply have been better. There are few entities in the world who can lay out Google-like money, but Jeff Bezos’ Amazon is one. It’s possible that they simply offered more cash up front.
– The deal may have been less legally complicated. Some analysts believed that a YouTube/Twitch merger could trigger an anti-monopoly investigation by the Department of Justice as both are leaders in the streaming video industry. Many believe that the deal was delayed to provide Google’s lawyers with time to prepare for the inevitable legal challenge. A merger between Amazon and Twitch is unlikely to trigger a DoJ investigation meaning les s legal headaches and a vaster payday.
– The reason most strongly hinted at by Shear’s blog post is autonomy. He writes “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.” Google tends to fully assimilate the companies it purchases into its existing structure. Twitch would most likely have become a division of YouTube. Amazon is known to be more hands-off with its acquisitions. Tech companies like Audible have maintained their own identity within the Amazon empire.
Regardless of the reason the merger appears to be a done deal. The Twitch community has responded on social media with a mix of surprise and anxiety about the future. Some expressed relief at the possibility of Twitch maintaining a level of autonomy but most seem convinced that any acquisition deal would be detrimental both to the service and to the community. It’s likely we won’t see any major indication of what Twitch will look like under Amazon until the deal finalizes later this year.