Google’s Twitch acquisition falls through, Amazon steps in (Updated: Confirmed)

Updated @ 19:01, August 25: Amazon has confirmed that it has acquired Twitch for $970 million in cash. Twitch has a statement confirming the acquisition, too. The original story remains below.
After weeks of uncertainty and user revolt, the story surrounding Twitch just got more bizarre. Reports are coming in today claiming that Amazon will be acquiring the popular video streaming service, and that only adds to the confusion of the last month or so. This is an unexpected development, but considering other recent acquisitions, buying Twitch makes a lot of sense for Amazon.
Last month, it was widely reported that Google had purchased Twitch for upwards of one billion dollars. Not long after, Twitch began rolling out a number of unpopular changes including the introduction of an automated audio matching algorithm intended to silence copyrighted music on archived videos. In the wake of these sweeping changes, some people started questioning whether or not the Google acquisition actually happened.


Now, the Wall Street Journal is reporting that Amazon — not Google — will be acquiring Twitch Interactive for more than one billion dollars. The WSJ’s source claims that the Google deal went sideways over the last few weeks, so the original reports weren’t entirely unfounded. It seems that Google did plan on buying Twitch, but negotiations soured before contracts were signed.
So, why would this online retailer want to get into the video game live-streaming business? Simply put, it thrusts Amazon’s gaming products into the spotlight. Twitch is wildly popular among the gaming community, and controlling Twitch gives Amazon the legitimacy it seems to so desperately want.
Not only does Amazon sell a (half-hearted) game console, but it’s made a number of strategic gaming acquisitions over the last few months as well. Double Helix, the studio best-known for the 2013 Killer Instinct reboot on the Xbox One, was snatched up in February. Kim Swift (Portal) and Clint Hocking (Far Cry 2, Splinter Cell) quickly joined Amazon Game Studios as well. Amazon is making a serious play to enter the gaming world, and it isn’t shying away from opening up its pocketbook.
While this most certainly won’t impact the ability of Xbox One, PS4, and PC gamers to stream gameplay to Twitch, it will likely hasten change across the industry. Sony and Microsoft definitely don’t want to rely on a service owned by a potential competitor, so I wouldn’t be surprised to see Twitch alternatives like Hitbox start to receive more attention. The unpopular changes recently implemented are already driving some users away, so it seems possible that Twitch is being acquired at its peak — only to tumble in popularity in the coming months. It’s happened before, and it’ll happen again. So, what do you think? Is Twitch dead, or is it destined for YouTube-like ubiquity?