NEW YORK – Amazon is hoping to become the ESPN of video games.
The e-commerce giant is buying streaming platform Twitch Interactive for $970 million in cash as it seeks to take part in video gaming’s growth as an online spectator sport.
Twitch is a multichannel online network built for a generation of people who not only enjoy playing video games but find it entertaining to watch others who might impart tricks and tips for excelling at their favorite games.
Amazon’s purchase is an acknowledgment that gameplay video feeds are increasingly lucrative. Twitch had 55 million unique visitors in July, up from 20 million in 2012. Most visited the Twitch.tv website to watch other people play live or recorded games – competitions interspersed with advertising.
Digital video advertising in the U.S. is expected to reach $5.96 billion this year, according to eMarketer, up 41.9 percent from 2013.
“Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month,” Amazon CEO Jeff Bezos said in a statement.
The deal is the latest example of Amazon expanding into new commercial arenas. It introduced its own smartphone, the Fire, this year. Earlier this summer, it added same-day delivery and a set-top video streaming device to its list of services for members of Prime, its $99 annual loyalty program.
Amazon already has an in-house gaming studio that makes games, and its Fire TV set-top box was designed to attract gamers.
Twitch CEO Emmett Shear said Amazon is a good fit because “they believe in our community, they share our values and long-term vision.”
Google had been in talks to buy Twitch, but no deal materialized. Seattle-based Amazon’s purchase of Twitch is set to close in the second half of 2014.
In July, Twitch users viewed more than 155 billion minutes of content produced by more than 1 million broadcasters, ranging from individual gamers, pro players, video game publishers, developers and others.