YouTube is about to seriously beef up its video game content offerings. Google has reportedly signed a deal to acquire video-game-streaming-service Twitch for an estimated $1 billion. (Via Twitch, Getty Images)
Granted, the acquisition is still a rumor, but one that's now being treated as all but confirmed.
Venturebeat has the sources familiar with the matter, who say the exact terms of the deal are still unclear, but investors are "getting significant returns that are multiple times the amount they originally invested."
Alright, alright, Google's about to drop a reported $1 billion dollars on a streaming service? Why?
Well for one, as of January this year, Twitch had one million monthly active users — a number that continues to grow. I'm no video-streaming service, but I can bet YouTube would like to add those active users to its own collection. (Via Twitch / sips_)
Twitch also has streaming integration with Xbox One and Playstation 4, so users can easily broadcast their gameplay on Twitch. The company said "less than two months after the console launched, 20% of Twitch broadcasters were PS4 owners." (Getty Images, Getty Images)
But here's the real kicker: before Twitch had even launched integration with the Xbox or Playstation, comScore ranked Twitch as the number one video site in its gaming category. "Twitch has both the largest audience and the most-engaged users among all sites catering to the video game audience." (Via Business Wire)
And a writer for Gizmodo says Twitch was pretty much the only true competition for YouTube. If Google owns both services, it'll all but give the company control of the streaming-service market. (Getty Images)
In terms of engagement and activity, it's clear YouTube could benefit from a Twitch acquisition. But what about video game streaming in general — what's the appeal?
Mashable has an answer. "When asked about the appeal of watching other people play video games, the easiest comparison to make is sports. How many millions of viewers tune into Monday Night Football, Nascar or Formula 1?"
And Twitch says more than 50 million people tune in every month to watch these video game broadcasts. Inarguably, then, there's a sizable market for the service. (Via Twitch / PANIKbeats)
It's unclear at this point whether YouTube and Twitch will become one service, or if Twitch will continue to exist on its own — what is clear is YouTube and Google both stand to gain engagement, activity, and revenue from such an acquisition. Cue the pre-roll ads.
