Transfer Pricing Associates

Why does YouTube want to buy Twitch?

post Tuesday May 27, 2014

Tags: gaming, google, streaming, twitch, youtube


Twitch is essentially the YouTube for live gaming. People broadcast themselves playing and talking about games with each other, this can be done live or via archived footage. It is ironic that the real YouTube is now on the edge of purchasing Twitch for $1 billion. Google paid $1.65 billion for YouTube in 2006.

The video streaming service is very popular, last year they doubled their monthly audience from 20 million people to 45 million at the end of 2013; 900,000 unique broadcasters every month. Twitch was eventhe fourth largest source of network traffic after Netflix, Google and Apple in the United States.

Originally, Twitch was a spin-off from This was one of the first big live streaming video sites online and was launched in June 2011. Since its establishment, the site managed to raise a fund of $35 million from several capital firms. 

The future looks very bright for Twitch. It reported that 76% of its users are aged between 18 and 49 and that 68% are watching less TV to be able to focus more on Twitch and game entertainment. Furthermore, big games firms (2K games) and media sites (Machinima) are also on Twitch, which leads to even more publicity. The vice president of marketing of Twitch told Forbes that 2013 would be the year that will be the tipping point of streaming, because every major publisher, developer and media outlet in the world is represented on the site.

Twitch is not only represented online, they have also recently integrated their services in the new gaming consoles Sony Playstation 4 and Microsoft’s Xbox One. Already 100,000 new broadcasters had signed up since the release of the Playstation 4 in November 2013. Google’s Android and Apple’s iOS also have a Twitch-app.

Now we know that Twitch is very popular. Why is YouTube interested in buying the livestreaming service? Both services are benefiting from the same trend: the people going online to watch other people playing games. The western television industry has struggled to make that popular, while there are several gaming competitions showed on the Asian channels  on a daily basis.

Gaming and music are the most viewed genres on YouTube. If YouTube purchased Twitch, the status of the gaming genre will increase immensely. It would make YouTube the largest platform for e-sports (electronic sports) in the world. Furthermore, YouTube’s ads can also be shown to a bigger audience and that is probably an essential motive for them as well.

Source: businessinsider

Image courtesy of David Castillo  /

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