Report: YouTube Looking To Acquire Twitch For $1 Billion

By | 2 years ago 

When it comes to viewing videos about games there’s one place that the majority of us flock to: YouTube. We head there for trailers, Let’s Plays and to see glitches, highlights and bugs caught on video because when it comes to videos, that the go-to place. But the status quo is changing rapidly with YouTube often being second in command when we want to see real, raw and unedited footage live of our favorite games in action with Twitch providing unprecedented access to titles that haven’t even been released yet, alongside pro eSports coverage.

It’s Twitch that we head to for official streams of games from the developers behind them (even announcements like the new Unreal Tournament) and we’re even prone to make new gaming experiences out of the service (see: Twitch Plays Pokémon). Even with livestreaming efforts bolstered by Google Hangouts and a crack team of video experts, YouTube is losing ground to Twitch in the live gaming space and it’s struggling to keep up. That’s why then, YouTube is reportedly looking to buy Twitch for a cash sum of $1 billion.

The reports of a deal come after several sources informed Variety that YouTube is looking to make the biggest move in their 9-year history with Google (Google purchased YouTube for $1.65 billion in 2006) by looking to acquire Twitch for the $1 billion. Notably, that figure would be an all-cash deal effectively meaning an entire buyout with no room for Twitch’s founders – Michael Seibel, Justin Kan, Kyle Vogt and Emmett Shea — at the table by way of YouTube shares.

The fact that it would be unlikely that all four creators would be involved post-Twitch and YouTube merger could be a disappointment to some gamers who’ve long embraced the livestream platform, especially when Twitch’s user base is in the high millions after PS4 and Xbox One integration saw the service’s popularity skyrocket. Furthermore, many may raise concerns that Twitch could lose some of its gaming focus by being bought out by the Internet’s biggest video provider as opposed to a company with more gaming experience like Microsoft, who are also rumored to have made a bid for the video streaming service.

There’s also the question of what would happen to that aforementioned PS4 and Xbox One Twitch integration as although YouTube support is not yet available on PS4 (even accessing YouTube from the PS4’s browser is a dud), there is the strong chance that YouTube could replace Twitch’s streaming capabilities, forcing Google Plus-only comments in a similar way to YouTube’s existing service. And that was a painful and/or confusing transition for some.

YouTube Logo White Background

However, there still isn’t any certainty that the YouTube and Twitch deal will go through as additional sources to The Wall Street Journal say that the buyout talks are “at an early stage” and that a “deal isn’t imminent” as despite considering deals from YouTube, Microsoft and several venture capitalists, Twitch declined to comment when asked about the story, suggesting that nothing is finalized yet. YouTube is also reportedly preparing for opposition from the US legal system as the Justice Department could challenge the deal based on anti-competitiveness in the online video market.

Twitch’s founders are even said to be considering raising additional funding rather than going the buyout route, but as “people with close knowledge of the talks” also say that the founders think that YouTube is “the best fit.” Expect an official word on this one sooner rather than later with E3 around the corner – it may have an in impact on the Sony and Microsoft press conferences when it comes to talking about their system services and sharing features.

If YouTube does acquire Twitch, we’re curious how if it’ll still be called Twitch and how monetization will work in between Google’s Partner/AdSense program and Twitch’s own monetization options. If it does happen, it’s be nice to see the premium service knocked down and the forceful pre-load ads dropped. There’s also the issues over YouTube channels sharing names with Twitch channels.

Either way, for gamers interested in livestreaming through their PS4 or Xbox One, it is a big fail on the part of YouTube and the console makers not having the ability to edit and upload (without limits)  or livestream content to YouTube. This is there way in if they can acquire Twitch. Sorry, Ustream!

Sources: Polygon, The Wall Street Journal, Variety