Google To Buy Twitch For $1 Billion: How YouTube Could Benefit From The Gaming Live Stream Platform

Google Inc. (NASDAQ:GOOGL) is reportedly going to buy popular gaming live streaming platform Twitch Interactive for $1 billion.

Unnamed sources told Venturebeat on Thursday that the Mountain View, California, search giant has signed a deal to purchase Twitch, a live stream platform that specializes in hosting gaming content. Details about the acquisition haven't been confirmed, and this isn’t the first time Twitch was rumored to be up for sale.

Variety reported in May that Google-owned YouTube was in talks with San Francisco-based Twitch to acquire the service for a cash offer of $1 billion. In comparison, Google acquired YouTube in 2006 for $1.65 billion in Google stock. Venturebeat reports that YouTube is spearheading the Twitch acquisition, which would add more than 50 million active users per month and about 1.1 million casters to YouTube’s video audience and portfolio.

The majority of Twitch streams consist of individual users or casters providing live footage of gameplay and other related gaming content, but Twitch also caters to gaming companies and event producers with live stream press announcements and conferences such as the annual Electronic Entertainment Expo, or E3.

The addition of Twitch to YouTube’s portfolio would further expand YouTube’s live streaming capabilities to other video partners such as Machinima Inc., a gaming and media streaming company based in Los Angeles. The acquisition would also add Twitch’s subscription video model to the streaming giant as it aims to grab a larger piece of the online video gaming viewing audience.

In June, YouTube announced a tip jar feature, which mimics the subscription and donate feature built into Twitch. This feature addition was coupled with added support for the 48 and 60 frames-per-second (FPS) video, which gamers often prefer for smoother gameplay and richer in-game details.

While the addition of millions of viewers and streamers would be a welcome addition to YouTube’s growing portfolio of content, it’s not without its caveats.

Some individual streamers often play their own music playlists or stream games using music built into a game, opening up the possibility of Twitch streamers being consumed by copyright-enforcement litigation or policies, such as those enacted on YouTube.

YouTube is also reportedly in talks with several music labels to provide a paid music service through the streaming site, which is expected to launch in the next few months.

Yet the benefits of acquiring Twitch may far outweigh the negatives for YouTube as eSports and video game audiences continue to grow across the world, especially in China which now boasts an estimated 517 million gamers.