Amazon buys Twitch for almost $1 billion: Five things you need to know about its latest purchase

E-commerce giant Amazon has splashed out, paying close to $US1 billion ($A107 billion) for live video gaming platform Twitch.

Amazon said on Monday it will pay $US970 million in cash for the platform, which had previously been rumoured to have fallen into the hands of Google. The deal is expected to close by the end of this year.

“Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month —from The International, to breaking the world record for Mario, to gaming conferences like E3. And, amazingly, Twitch is only three years old,” said Amazon founder and chief executive Jeff Bezos in a statement.

“Like Twitch, we obsess over customers and like to think differently, and we look forward to learning from them and helping them move even faster to build new services for the gaming community.”

Twitch chief executive Emmett Shear said in the same statement the acquisition will allow it to “create tools and services faster than we could have independently”.

“This change will mean great things for our community, and will let us bring Twitch to even more people around the world,” he said.

So what is Twitch and why did Amazon fork out the big bucks to purchase it?

Here’s five things you need to know about the platform.

1. Twitch allows gamers to live stream their gameplay

Twitch enables game lovers to broadcast their gameplay sessions on PC, Xbox One or PlayStation 4 to viewers online, essentially turning what was once a solitary pursuit into a spectator sport.

Users typically see the screen of the person playing the game, as well as a video feed of the player’s face and a window that allows they to chat with the player and other viewers.

2. It is used by millions of gamers

Twitch has more than 50 million monthly active users and more than 1.1 million members who broadcast videos each month.  In a typical month, Twitch users will watch more than 16 million minutes of gameplay.

The platform has grown exponentially since it was launched in June 2011 with 3.2 million active users.

3. The platform started out as something called Justin.tv

Twitch was founded by Justin Kan and Emmett Shear, who also co-founded Justin.tv, one of the first websites to host livestreaming user-generated video.

Twitch was born as one part of Justin.tv, which the duo launched in 2007 and allowed users to broadcast their own video live streams.

But Business Insider reports Twitch soon took over Justin.tv, so much so that Justin.tv changed its name to Twitch in February this year. Justin.tv officially closed earlier this month, with Twitch becoming the business’ sole focus.

4. Twitch allows advertising

As with most other online social platforms, Twitch does share advertising revenue with those who broadcast their videos on the platform. And there is little doubt the advertising potential in the platform is at least part of Amazon’s attraction.

According to the New York Times, most Twitch broadcasters, which can include businesses and content publishers, currently earn very little from the platform, although there are some said to be earning more than six figures a year.

5. It may expand to include live concerts in the future

While Twitch’s users are dedicated gamers, the platform has experimented with live music concerts, raising the possibility of the platform morphing into a live equivalent of YouTube.

In July this year, Twitch hosting a free broadcast of a concert by musician Steve Aoki. According to The Verge, Twitch said at the time it had received feedback that 80% of its users would be interested in watching live concerts.