What's behind Amazon's Twitch obsession

What the Seattle-based tech giant's $970 million acquisition means for the future of the independent gaming industry.
The Twitch area at Pax Prime 2014 in Seattle.

The Twitch area at Pax Prime 2014 in Seattle. Photo: Twitch/ Facebook

The other night I asked my 22-year old son and some of his friends if they’ve ever heard of Twitch TV, the online gaming channel recently purchased by Amazon for 970 million dollars. They had no idea what I was talking about. And these were young men who had traversed the usual corridors of the gaming world, starting with Game Boys when they were 7 or 8, then early online versions of StarCraft on the family desktop, graduating to Sony’s PlayStation 2, Xbox, etc.

Like many parents, my wife and I limited our son’s screen time, monitored the game content and didn’t fret too much about whether playing computer games would render him incapable of normal speech or lead to a vampiric aversion to daylight. We figured he was passing through a developmental, peer-codified phase and as long as he got some exercise and kept his grades up — and could still occasionally look adults in the eye — we knew he’d be okay.

The phase passed. He moved on. Although he keeps his PS2 as a memento of his boyhood, I haven’t seen him play a video game in years.

So I am somewhat shocked to learn that the world of gaming, specifically online gaming, and more specifically the act of watching online gaming, has become a multi-million dollar business, with the explosive potential to become a multi-billion dollar business.

Twitch receives more than 55 million visitors to its website, which is like a TV channel where you can stream your own real time game and watch others play the games you love. Fifteen billion minutes of content are available on the station, all of it produced by more than a million freelance and start-up game broadcasters.

Twitch also broadcasts live gaming tournaments that draw thousands of spectators. A recent New York Times article reported the Key Arena was packed to the rafters last July for a tournament in which fans dressed up like their favorite game characters cheering on their favorite teams, many of them representing their home countries. A 4-day tournament in Poland drew 73,000 fans. Players compete for prize money in the millions of dollars.

This new development, the sudden rise of competitive online gaming broadcasts, is called e-sports. Think of it like ESPN, except the athletes are usually sitting down, their uniforms tend to be T-shirts and hoodies, and their aerobic training consists of walking to the door to pay the pizza delivery guy. They practice and play games like League of Legends, Dota 2 and Hearthstone: Heroes of Warcraft, all of it broadcast to fans who, if they can’t attend the events in person, can watch from the comfort of their basement.

Twitch viewership rivals the audiences for MTV, Comedy Central, MSNBC and CNN. The channel’s website proclaims, “Twitch is home to the most dedicated and highly skilled gamers on the planet. They shatter world records. They cruise through the newest titles. They make headlines with world-first accomplishments, and they make it all look easy. Discover why they’re the best at what they do on Twitch.”

Why wouldn’t Amazon want a piece of this action? The Godzilla of online retailers is already one of the top video game sellers in the world. In a press release they state that by acquiring Twitch the company is demonstrating its belief in the future of gaming. In other words, it believes the future of gaming could make a lot of money in the future for Amazon.

Twitch's CEO, Emmett Shear, appears to have guzzled the Amazon Kool-Aid. “We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster,” he said recently.

But Amazon has proven to be ruthless when it comes to the pursuit of their bottom-line belief in the customer’s right to buy anything and everything cheaply and immediately, and in Amazon’s right to be the only ones to sell it to them (i.e., the controversial new Amazon Price Check app).


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