YouTube is acquiring live video-game streaming service Twitch for $1 billion, entertainment magazine Variety reports, which would make it the largest acquisition for YouTube to date. Such a Google-owned video-game streaming service could be great for gamers, viewers and advertisers—at least so long as Google+ stays far, far away from it. (Both companies declined to comment.)
Non-gamers may not understand just how huge Twitch is. The service, which lets gamers watch, play, record and stream live video game play, and has more peak traffic than both Facebook and Hulu. Just how much traffic is that? In 2013, viewers watched 12 billion minutes of gaming each month.
Twitch, a spinoff of online-video broadcaster Justin.tv, originally limited itself to streaming feeds from PC gaming, thanks to the closed ecosystems of consoles. But the service got a big boost when Sony and Microsoft built Twitch support into the PlayStation 4 and the Xbox One, the gaming startup got a boost.
Xbox One streaming accounts for a significant portion of Twitch’s traffic. In the weeks following the launch of the Twitch Xbox One app, Xbox One streaming accounted for 22% of unique broadcasts, which run an average of 28 minutes. That’s about as much time as streaming one sitcom on Hulu.
“Microsoft has a put a lot of time and effort into ensuring their Twitch integration would be a robust experience, and based on the amount of Xbox One owners streaming from their living rooms, the move paid off,” Twitch COO Kevin Lin told ReadWrite in April. “This high rate of adoption for our console integrations has elevated our role in the entertainment industry. People go to Hulu to watch TV, Netflix to watch movies, and now they go to Twitch to watch and broadcast video games.”
Buying Twitch makes sense for YouTube. The Google-owned video site has yet to capitalize on live video—most live streams happen elsewhere and appear on YouTube once they’re done. Assuming spectator gaming continues its meteoric rise, Google could benefit from millions of eyeballs—and millions of dollars aimed at watching other people play video games.
The Googlefication of Twitch
The buy makes sense for Google, but gamers might not be so happy.
Typically, players use “gamertags” or usernames not associated to any personal information that don’t tie their account to a real identity. These days, Google is all about real identity.
Last year Google required anyone who wanted to comment on a YouTube video to have a Google+ account, and did away with anonymous comments. The move was not well-received by the YouTube community, and YouTube ended up creating a comments page to appease users and make it easier for video creators to moderate comments on their videos. Of course, you still need to have a Google+ account to comment in the first place.
If Google goes a similar route with Twitch and forces users to login with Google credentials, it’s likely the gaming community will be just as outraged as YouTube users were. Though Twitch does have the option for Facebook Login already, so some users might already be accustomed to sharing personal information with the service.
Making Money Off E-Sports Talent
Just like YouTube, Twitch has its own share of homegrown stars. Some of them are so good they’ve quit their jobs to play video games professionally.
Twitch, like YouTube, has a partner program that lets them take a portion of the advertising revenue. The select group of personalities, leagues, and tournaments has some control over the commercial breaks, and are offered multiple options to engage with the fans and community.
The popularity of spectator gaming has even found its way offline. Events attract thousands of people willing to pay to watch their favorite gamers pwn in real life, and the payouts can be worth millions.
YouTube is hoping its own star-making talent translates into big advertising dollars for some of the top video creators, specifically lifestyle oriented channels. With Twitch, YouTube can tap into an entirely new pool of talent, and appeal to advertisers with an audience that’s glued to watching their favorite gamers—and intermittent advertisers—for hours on end.
Lead image a screenshot from Ducksauce on Twitch.tv