News reports have speculated that Google's YouTube division is getting ready to purchase a company called Twitch for upwards of $1 billion. So what is it and why does Google want it?
In a nutshell, Twitch is the YouTube of gaming. It is an online-television network dedicated to video games and “e-sports.” The site is popular in the gaming community, experiencing exponential growth over the last year but is yet to hit the mainstream.
Twitch began in 2011 after it was spun-off from live streaming site Justin.tv. Since then the site has raised more than $40 million in funding and generated an audience of 45 million unique visitors each month. One report, cites Twitch as the fourth largest source of network traffic in the United States (behind Netflix, Google and Apple).
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According to Twitch, 76 percent of its audience are between ages 18 and 49. Fifty-eight percent of users spend more than 20 hours on the site per week. Almost every user watches live streams of games, 61 percent have discussions with other Twitch users, 38 percent watch highlight videos and a quarter of users broadcast to Twitch when they play themselves. These stats coupled with how engaged the users are, could mean a gold mine for Google.
For instance, in February a stream called “Twitch Plays Pokemon” went viral after the broadcaster created a program that allowed the game to be played in a crowdsourced manner by translating chat commands into game controls. More than 100,000 people played the game at the same time. Twitch’s vice president of marketing Matthew DiPietro told CNN,"This is one more example of how video games have become a platform for entertainment and creativity that extends way beyond the original intent of the game creator. By merging a video game, live video and a participatory experience, the broadcaster has created an entertainment hybrid custom made for the Twitch community."
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On YouTube, gaming is the one of the most popular genres next to music. By acquiring Twitch Google will be the number-one destination for gaming-related entertainment and e-sports programming. In hindsight, this acquisition could look a lot like Google’s YouTube purchase in 2006 for around the same price, now one of the tech giant’s most recognizable brands.
That said, expect backlash. With Twitch having 45 million users a month and YouTube having 1 billion, regulators may question the acquisition. Stay tuned.