According to reports Google’s YouTube is about to buy Twitch, a popular videogame-streaming company, for more than $1 billion. The deal would give YouTube even greater reach in the online video space, something that will no doubt be looked at closely by federal regulators.
There’s no official word on the sale yet but it’s expected that the deal was all cash. That will make it the biggest purchase YouTube has ever made. YouTube itself was acquired in 2006 by Google for $1.65 billion.
Twitch was launched in June 2011 by Justin Kan and Emmett Shear, co-founders of Justin.tv. It allows consumers to broadcast live video streams of themselves playing videogames and it also allow video game fans both professionals and amateurs to communicate with each other during the broadcasts.
The company claims more than 45 million gamers visit its site every month. Titanfall is the most broadcast game on Twitch with more than 10 million minutes aired from the game to date. Twitch can be viewed using a Web browser, or apps on the Android, iOS, PlayStation 4, and Xbox One platforms. Twitch is everywhere and highly accessible.
In September, Twitch raised $20 million in funding from Thrive Capital, WestSummit Capital and Take-Two Interactive Software Inc, among other parties. By 2014, Twitch had grown so huge that the parent company was rebranded as Twitch Interactive. Twitch Interactive, which includes Justin.tv, has about 130 employees.
YouTube is so far the No. 1 platform for Internet video providing more than 6 billion hours of video per month to 1 billion users globally. Gameplay videos already are a highly popular category on YouTube. The company expects the Justice Department to take a hard look at whether acquiring Twitch raises anticompetitive issues in the online-video market. Currently, gamers who wish to ditch display and video ads subscribe to Twitch’s $8.99 per month Turbo premium service.
Twitch also plays in the separate “e-sports” market including live professional gaming competitions and also include tournament organizer Major League Gaming, a New York-based company whose investors include Oak Investment Partners and Relativity Media CEO Ryan Kavanaugh.
In February according to a techsite that Twitch highlighted data that put it ahead of companies like Facebook, Amazon and Hulu in terms of online traffic share in North America. It accounted for 1.8 percent of highest internet traffic. Google, by comparison, came in second with 22 percent, right behind Netflix with 32 percent.