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Twitch To Amazon - A $1bn Bargain

Playstation Academy winner Jann Mardenborough has
made the transition to real racer - future winners probably
won't need to.
Amazon appears to have snatched Twitch out from under Google's nose in an audacious purchase which indicates the future direction of TV programming.

If you don't already know, Twitch is a service which allows gamers to stream their games to be watched by others. It's an incredibly popular service, with more than a million gamers streaming their match-ups and tens of millions more watching them.

The idea that someone would spend the time to watch someone else play a game only sounds strange if you don't understand that most of today's professional sports started out as games played for fun. Excelling at an online game is every bit as challenging - albeit in different ways - to becoming a top class tennis or  soccer player.

Whilst the top Xbox and Playstation channels feature FIFA 14 and Forza 5, it's interesting that games like Counter Strike, Diablo, World of Warcraft and even Minecraft feature in those top lists too. I suspect that these viewers aren't the sort who necessarily get into the sports channels - TV or online - and form an untapped, highly marketable demographic.

Which brings us to Amazon. It has acquired a content creation channel which allows it to sell subscriptions and run advertising to generate income streams. More importantly it creates a new source of (possibly unique) content for it's Fire TV service. Is digital sport any less enjoyable or engrossing for the viewer than the real thing? I'm sure you've had the same experience as I have, where a group of friends playing FIFA on the Xbox get just as engaged in supporting the two players 'in-game' as they do with the real thing.

In the future it's just as likely we'll be cheering for our digital heroes as our sports stars. And just in case you don't believe the level of skill is equivalent, consider the achievements of Playstation Academy winner Jann Mardenborough, who has proven that it is possible to take skills from Gran Turismo to the real track. The 23 year old has achieved a podium at the 24 Hours of Le Mans and wins in the GP3, British GT and Toyota Racing championships in the three years since winning the Play Station competition.

In terms of value Amazon shouldn't have any trouble in recouping its $1bn. In fact in a few years time we'll probably be talking about this being a bargain acquisition in the same way that Google's purchase of YouTube has become to be seen.

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