Video game coyeurism: Google’s latest R10 billion acquisition

By on July 30, 2014

YouTube, the online video platform owned by Google, has reportedly snapped up video game live-streaming firm Twitch.

While the die-hard stereotype of sunlight-starved nerds locked in their bedrooms may still hold true, gamers have been connecting online for years. Nonetheless, the growing trend of broadcasting gameplay live online, from individual users to big tournaments with impressive production value,  and millions of people tuning in to watch, sounds slightly bizarre to those of us not permanently connected to keypads.

But in business a trend is a trend, and as Google continues on its mission of worldwide domination, its near-monopoly of online video through YouTube is marching onward. The search giant has reportedly sealed a deal to buy video game live-streaming company Twitch for just over R10 billion, according to Venture Beat.

Twitch was founded in June 2011, off the back of another live-streaming site Justin.tv, and has since raised more than R350 million from various venture capitalists. When it launched it had around 3.2 million monthly active users. It now has 50 million users tuning in every month and 1.1 million members uploading their live gameplay.

Around the world, people spent 2.4 billion hours watching e-sports in 2013, up from 1.3 billion in 2012, according to researchers IHS technology. “While advertising in and around a game has often proved to be a difficult proposition, advertising in online video is commonplace,” says IHS Research Director Piers Harding-Rolls.

And advertising, of course, is Google’s bread and butter. The deal is apparently going through YouTube, which already has some game live streams. A glance at the site shows those aren’t particularly popular, though. Buying Twitch is a fairly simple way for YouTube to gobble up a market it’s not yet cracked.

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