Google’s YouTube has finalised a deal to buy Twitch, a popular videogame-streaming company, for more than $1 billion.
The deal, in an all-cash offer, is expected to be announced at the earliest. If completed the acquisition would be the most significant in the history of YouTube, which Google acquired in 2006 for $1.65 billion. The impending acquisition comes after longtime Google ad exec Susan Wojcicki was named CEO of YouTube earlier this year.
Representatives for YouTube and Twitch declined to comment.
San Francisco-based Twitch lets users upload and watch free, live gameplay videos that can be streamed from Microsoft Xbox and PlayStation 4 consoles, and also sells ad-free subscriptions. The company claims to have more than 45 million monthly users, with more than 1 million members who upload videos each month. It also has deals to distribute shows from partners including CBS Interactive’s GameSpot, Joystiq and Destructoid.
YouTube is preparing for U.S. regulators to challenge the Twitch deal, according to sources. YouTube is far and away the No. 1 platform for Internet video, serving more than 6 billion hours of video per month to 1 billion users worldwide, and the company expects the Justice Department to take a hard look at whether buying Twitch raises anticompetitive issues in the online-video market.
Twitch was launched in June 2011 by Justin Kan and Emmett Shear, co-founders of Justin.tv, one of the first websites to host livestreaming user-generated video. Shear currently serves as CEO of Twitch.
Founded in 2011, the startup has raised about $35 million in funding. Investors include Bessemer Venture Partners, Alsop Louie Partners, WestSummit Capital, Take-Two Interactive Software, Thrive Capital and Draper Associates.
Gameplay videos already are a highly popular category on YouTube. Other players in the so-called “e-sports” entertainment market include tournament organizer Major League Gaming, a New York-based company whose investors include Oak Investment Partners and Relativity Media CEO Ryan Cavanaugh.
In March 2014, Twitch represented 1.35% of all downstream bandwidth on North American fixed-access broadband networks — nearly triple from last fall, according to bandwidth-equipment company Sandvine.
About an hour after AT&T officially announces their plans to buy DirecTV, word of another billion-dollar acquisition has surfaced.
The story this time around: Google/YouTube reportedly want Twitch.tv, the increasingly/explosively popular service meant to let gamers watch others play games, live. The purported price tag? 1 billion.
One version is that it’s already a done deal, and they say the official announcement is looming. Other sources say the talks are very early on – too early for a price to be set, even.
While the concept behind Twitch might seem crazy, (“Why would you want to watch someone else play video games?”), the service has done nothing but rocket in popularity since launching back in 2011.
Turns out, people like to watch other people play games. With competitive games, like League of Legends, gamers watch to learn; with other, more casual games, like Minecraft, they watch just to be entertained.
Twitch.tv is actually something of an oddity, in that it’s an independent spin-off of another company.
A few years after launching Justin.tv (another video livestreaming service, meant primarily to stream live video from your webcam) its founders noticed that the site’s gaming channels always managed to pull in particularly massive numbers. In 2011, they spun the site’s Gaming section into a site of its own — Twitch.tv. By 2014, Twitch had grown so huge that the parent company was rebranded as Twitch Interactive.
Twitch has raised roughly $35M since becoming an independent company.