As gaming becomes more mainstream, could Twitch be the next YouTube?
Google could be about to make the fourth most expensive acquisition in its history.
Entertainment site Variety reports that the company has agreed to buy the immensely popular videogame streaming service Twitch for $1 billion in cash (£594m). In comparison, Google paid $1.65 billion for YouTube in 2006.
The Wall Street Journal takes a more cautious line – it says the two companies are discussing a possible deal, but the talks are still at an early stage.
Twitch recently made the news thanks to a social experiment that had more than a million people playing a single game of Pokemon Red – the commands were fed via chat, and executed in the order they were received.
Games are business
Twitch was launched in 2011 by co-founders of Justin.tv, another pioneering video streaming project. The free platform lets users upload and watch live gameplay videos streamed from PC, Xbox or PlayStation consoles.
Twitch also distributes video content from several gaming publications and broadcasts major e-sports tournaments. So far the company, which is headquartered in San Francisco, has been financed by around $35 million in venture capital.
According to the analytics service Alexa, www.twitch.tv is currently the 255th most popular website in the world. Meanwhile cloud start-up DeepField recently estimated that during peak times, Twitch produces more traffic than Facebook or Amazon.
In February, the company claimed that it had more than 45 million unique monthly visitors, who were watching content created by about a million core users. Experts note that Twitch can charge premium rates for advertising, since its audiences are more engaged with the content and spend more time on specific channels.
The acquisition could improve the quality of streaming content on YouTube, which is struggling to get its audiences interested in the live format.
Sources told Variety that the deal will be announced officially in the nearest future. However, it is yet to receive the blessing of the regulators, who might worry about its impact on competition considering YouTube’s dominant position in the online video market.
The Verge reports that Twitch turned down multiple offers, including one from Microsoft, believing it is Google that will take the company in the right direction.
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