July 28, 2014
Google (GOOG) reportedly has closed on its agreement to purchase video game live-streaming site Twitch for $1 billion, according to sources familiar with the deal. While neither Google nor Twitch have commented on the deal, the addition of the popular video game streaming site to Google’s already formidable arsenal could be the next step in furthering its dominance of the online video market.
Variety broke the news of the alleged acquisition back in May, saying Google had planned to pay $1 billion in cash to integrate Twitch into its YouTube division. While the exact details of the supposed deal have not been disclosed, combining the popular video gaming site with the already massive sensation that is YouTube could see Google holding the reins to one of the Internet’s biggest and most lucrative video-streaming sites in the world. Google acquired YouTube in 2006 for $1.65 billion.
So if the rumors are true, what does this mean for the channel community? While video games are mostly outside of the realm of most hardware and software distributors and VARs in the reseller channel, some companies including Microsoft (MSFT) and Sony still hold a big stake in the computer hardware and cloud services market. While Microsoft flounders in the mobile device and legacy computing arenas, its popular Xbox One console continues to succeed in the market, with Microsoft announcing its sales figures had doubled in June.
Although it’s less prevalent in the channel, Sony also plays a large role in the computing sphere, with its PlayStation 4 console selling a reported 7 million units worldwide since launching in November. And let’s not forget hardcore PC gamers, many of whom spend thousands of dollars on modifying and tweaking their personal gaming rigs to keep up with the latest game requirements.
If the rumors of the acquisition are true, we could be on the horizon of a massive rise in popularity for e-sports, which means major advertising revenue opportunities for companies savvy enough to get on board. And with its other recent purchases, such as Titan Aerospace in April and Skybox Imaging in June, Google is quickly approaching Internet monopoly status. Which begs the question: Does Google really need to be any bigger than it already is?
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