Amazon is officially acquiring Twitch.tv for $970 million

It’s official: Amazon is going to acquire video game streaming site Twitch for $970 million in an all-cash deal. It’s a move that caught most of us off-guard, as the common understanding was that Google has or was going to buy the video streaming startup for somewhere around a billion dollars. But in many ways Amazon’s purchase of the company makes a lot of sense. At the very least, it’s unlikely Amazon will lose money on the deal.

The video in video games is suddenly a billion-dollar business. Video games have long been something people played. But in the last few years, thanks in part to fast Internet access and multiplayer games, the games have become something that people sit back and watch, too. On Monday, that new habit enticed the web giant Amazon to reach a $1.1 billion deal to buy Twitch, the most popular website for watching people play games. The deal for Twitch is the latest sign of the way forms of behavior once seemingly on the fringe can, in the hands of tech entrepreneurs, turn into huge online communities in no time. Twitch did not exist a little over three years ago, and it now has 55 million unique viewers a month globally, helping turn games into a spectator event as much as a participatory activity.