updated 09:35 pm EDT, Thu July 24, 2014
Deal said to be worth $1 billion, matching previously rumored purchase amounts
A new report has surfaced that Google has signed a deal that would see the search giant picking up the popular game streaming platform Twitch for $1 billion. The report adds builds on the previous report floating around that Twitch was being courted by Google's video arm for a possible purchase with a price tag in the same ballpark. By purchasing Twitch, Google could be positioning itself to be the number one destination for live streaming games, as well as watching associated videos.
Dean Takahashi of VentureBeat reports that sources close to the matter say that Google has signed the deal for the streaming service acquisition. Variety originally reported in May that YouTube would be handling the $1 billion acquisition, but neither YouTube nor Twitch commented on the alleged purchase. The report adds that the exact price of the purchase is unknown, but states that investors would be getting "significant returns that are multiple times the amount they originally invested."
The potential deal could run into legal hurdles for all companies involved. If Google expects to merge Twitch into YouTube, there could be the potential for antitrust questions about a combined service. YouTube, far and away the most popular streaming site on the Internet, stands well above Twitch's more than one million active streaming members. However, streams draw in 45 million views per month, according to Twitch.
Twitch was founded June 2011 by the cofounders of Justin.tv, Justin Kan and Emmett Shear. In February, the company announced that it was replacing the Justin.tv corporate banner with Twitch Interactive, Inc. The service has seen tie-ins with consoles, such as the PlayStation 4, allowing gamers to broadcast their play sessions from the comfort of their couches.
If the deal signing turns out to be true, Google could be entering the video game streaming sector at a time when the market is witnessing large growth. Twitch has been central to the community of streaming, monetizing "Let's Play" videos and the growth of eSports. With eSports gaining greater attention in North America, large scale events like Valve's The International for Dota 2 could become common place. ESPN broadcasted the gaming event that boasted a prize pool of almost $11 million.