Amazon scoops up video gamer site Twitch for $970M

Acquisition means more 'eyeballs for ads and other content'

Amazon announced Monday that it is buying Twitch, a video game live-streaming service.

The online retailer said it will purchase all of the outstanding shares of Twitch for approximately $970 million in cash. The acquisition is expected to close in the second half of 2014.

"Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month… And, amazingly, Twitch is only three years old," said Jeff Bezos, founder and CEO of Amazon, in a statement. "Like Twitch, we obsess over customers and like to think differently, and we look forward to learning from them and helping them move even faster to build new services for the gaming community."

WIth Twitch, users can record and show their own gaming experiences, as well as chat with other players.

"It's all bits and bytes to Amazon," said Dan Olds, an analyst with The Gabriel Consulting Group. "Twitch has around 60 million users, which is a pretty big chunk of folks. For Amazon, this would be all about eyeballs for ads and other content -- eyeballs that are there for a lot of time, and with a market that skews young."

Whether Amazon is heavily into gaming at this point would be irrelevant, according to Olds.

The average Twitch user, for instance, plays about 106 minutes a day. Those users, who range in age between 18 and 49, say they watch less TV in order to do more gaming. That means it would be a highly captive audience for Amazon.

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