Back in August last year Amazon paid a huge $US970 million to acquire Twitch, the live video game streaming site.
Speaking at The Guardian’s Changing Media Summit in London on Thursday, Twitch CEO and co-founder Emmett Shear explained why he is happy he plumped for Amazon and why the deal has “worked out very nicely” so far.
Shear said the reasoning was fairly straightforward: Amazon sells vast quantities of games. Beyond retail, Amazon also does a great deal for the gaming industry through its cloud computing platforms, EC2 and Amazon Web Services.
“Over half of game developers are using EC2. That number is probably even higher now. More than half of the people that make video games are consumers of Amazon services already. So going to the table, there’s a retail operation, they sell video games effectively, they have an amazing platform for producing video games. Twitch brings that missing piece of the puzzle: Community,” Shear said.
What initially impressed Shear in the dealmaking process was Amazon’s commitment for Twitch to remain independent.
“They didn’t really think they knew the Twitch business better than the people who built it. I think that really spoke to me and one of the best things about Amazon is that they were very clever, smart, understood things we explained very quickly, but didn’t think they could necessarily do it better than us,” Shear added.
Amazon has remained true to that commitment, according to Shear.
He said: “It worked out very nicely. Sometimes when you have acquisitions, it’s a big company buying a small company that’s threatening their core business. That can be very destructive to a small company. The big company knows their business, does not really want to change that core business, and is buying you to get you out of the way. The nice thing about this acquisition is that’s not going on.”
Twitch now claims 100 million monthly users who spend an average 106 minutes a day watching content on the platform.
Shear likened Twitch to TV due to its high retention rates and multi-hour viewing sessions and said many users (mostly young men) have completely replaced TV with Twitch.
“We are on a lot of platforms that enable you to connect Twitch through the TV, like Chromecast, Apple TV. We have that opportunity for everyone that uses that mobile device to throw it up on the big screen — there’s a lot of demand for that. Over time you will see Twitch literally replace your television,” he said.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
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