What the acquisition of Twitch says about Amazon’s plans for the future
James R | On 28, Aug 2014
This week, Amazon announced a surprise move: the purchase of Twitch for almost $1 billion.
The acquisition came as a surprise for many, who thought that Google would be the company to snap up the video game streaming site, but the decision reveals a lot about Amazon’s plans for the future.
The company has expanded its range of multimedia services in recent years, not only rebranding its video on-demand offering as Amazon Prime Instant Video but also introducing the Kindle and Amazon Prime Music. Music, books, TV and film. Games are the other major market Amazon is yet to corner. That is, until this year.
Near the start of 2014, Amazon announced its latest product: Fire TV, a set top box that plugs into your telly and connects to the web. VOD apps and music apps in the living room? So far, so standard. But Amazon’s streaming media device goes one step further than the Rokus and Chromecasts of this world – as the included controller pad suggests, it comes with its own gaming platform built-in.
Amazon has long shown an interest in games, launching an app store a few years ago to go with its Kindle Fire tablet. It completed the company’s roster of digital products to sell: Amazon is, after all, a retailer, which relies upon coming up with new ways to sell products to consumers. The Fire TV box is one such way to encourage people to spend money in Amazon’s stores.
The company is thinking bigger, though: taking a leaf from Netflix’s books, it realises that original content is a big selling point in this increasingly fragmented digital era. Why get a Fire TV when other boxes are available? Enter Double Helix Games, which Amazon acquired in February this year – “as part of our ongoing commitment to build innovative games for customers”, a spokesperson told Game Informer.
The Fire TV, complete with solid hardware specs designed for gaming – a quad-core processor with over 3x the processing power of Apple TV, Chromecast, or Roku 3, a dedicated GPU, plus 4x the memory of Apple TV, Chromecast, or Roku 3 – suddenly had a development team that could offer customers’ something unique.
When the box was launched, Amazon Game Studios also revealed Sev Zero, the Studios’ first game built from the ground up for Fire TV.
The sci-fi game combines a fast-action third-person shooter experience with the calculated strategy of tower defence gameplay for the app-friendly price of $6.99 – or, for free with the purchase of a Fire game controller, a move that, naturally, encourages more spending on Amazon products.
“We already have many great developers on board like 2K, AOL, Bloomberg, Clear Channel, Disney, EA, ESPN, Gameloft, Hulu, Mojang, Pandora, SEGA, SHOWTIME, Telltale, Ubisoft, and Vevo,” said Amazon in April. “And with today’s announcement we expect many more to join.”
How to consolidate the company’s move into the gaming arena?
The leading live video platform for gamers saw more than 55 million unique visitors view more than 15 billion minutes of content in July, produced by more than 1 million broadcasters, including individual gamers, pro players, publishers, developers, media outlets, conventions and stadium-filling esports organizations.
“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 – from The International, to breaking the world record for Mario, to gaming conferences like E3. And, amazingly, Twitch is only three years old,” says Jeff Bezos, founder and CEO of Amazon.com.
Comments from David Gordon Green and other filmmakers have hinted at Amazon’s flexibility and emphasis on creativity when it comes to original video – a focus that appears to apply to their gaming arm too.
“Like Twitch, we obsess over customers and like to think differently,” adds Bezos, “and we look forward to learning from them and helping them move even faster to build new services for the gaming community.”
Twitch CEO Emmett Shear notes that their apparent autonomy and opportunity for growth, supported by Amazon’s finances and infrastructure, is ideal for them: “Being part of Amazon will let us do even more for our community. We will be able to create tools and services faster than we could have independently. This change will mean great things for our community, and will let us bring Twitch to even more people around the world.”
For Amazon, that expansion and creation means that they take even further steps into the gaming world, becoming a company that produces games, plays games and broadcasts games live too.
While Netflix continues to enjoy the leading position in the VOD sector, the acquisition of Twitch shows that Amazon is thinking bigger: not just about video on-demand but at media on-demand as a whole. And where do you get things on-demand from? A giant digital shop.