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YouTube purchases Twitch for $1 billion

- May 18th, 2014

Looks like Google couldn’t scratch that itch.

Variety reported on Sunday that YouTube, one of Google’s largest subsidiaries, had struck a deal to buy Twitch, one of the largest video game stream hosting sites, for $1 billion.

Although it’s still rumoured with no official comment from either the YouTube or Twitch camps, if the acquisition is approved and formally announced, it would be YouTube’s largest purchase since being bought by Google in 2006.

Interestingly enough, when YouTube was acquired by Google and brought into the company’s massive extended family, it also came with a $1.65 billion price tag.

Although the deal is still being smoothed out, it didn’t take long for streamers to express their support or disapproval of the merge.

While some welcomed the notion of having a financially secure and well run company like YouTube and Google at the helms of the still young and upcoming streaming service, others expressed concern over the idea of losing all rights to creative content uploaded.

One of the biggest questions coming into play is whether the more popular Twitch streamers, often times already repped by a professional gaming agency, will become YouTube sensations. If that’s the case, there’s a chance this isn’t the last time Twitch makes industry headlines.

When Disney announced they would be purchasing Maker Studios -a talent agency that works predominantly with YouTube stars, for $500 million, the online world trembled. Would YouTube celebrities like PewDiePie suddenly be considered Disney stars?

It’s not a stretch of the imagination by any means, then, to assume that as Major League Gaming ((MLG) and its top ranking players become bigger names world wide, and as the streaming numbers continue to climb, it’ll eventually become an area Disney will be looking to invest in.

The acquisition of Twitch, however, is one of the most logical moves YouTube could have made. According to Matt McLernon, Communications Manager for YouTube, the most popular content on the site is filed under the gaming category.

McLernon also admitted the company had been looking into ways to cater to their gaming audience who wanted a better platform to stream from on the site.

Looks like they found it with Twitch.

Twitch, launched in June 2011, allows people from around the world to stream, upload, and watch live gaming channels for free. The more popular channels, which boast anywhere from one million viewers to 15 million viewers, can be subscribed to for a premium fee, often set at $4.99.

The streaming service has made headlines multiple times over the past year, with channels like Twitch Plays Pokemon (a collaborative effort from millions of people to defeat the original Pokemon game live) gaining immense online traction. The San Francisco start up also played host to the League of Legends (a massive online battle arena (MOBA) game) championship, drawing in 32 million live viewers for the final match.

Since the integration of Twitch into the newest generation of consoles –the Playstation 4 and Xbox One- Twitch has seen an exponential increase in active streamers and watchers. At last check, Twitch reported it had 45 million monthly users.

To put that in perspective, that’s about five per cent of Twitter’s monthly active user base.

Variety also reported the acquisition should be announced relatively soon, with inside sources telling the trade magazine consumers can expect to hear a more public announcement within the upcoming week.

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