Why Amazon’s Twitch acquisition should help drive Fire TV sales

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Sep. 3 2014, Updated 1:00 p.m. ET

Amazon launched Kindle Fire TV in April this year

In the previous part of this series, we discussed how Twitch should help Amazon (AMZN) boost its online advertising business. But Twitch could help Amazon in another way—by driving sales of its Kindle Fire TV set-top box.

A few months back, Amazon announced the launch of Kindle Fire TV, a set-top box to compete with Apple (AAPL) TV and Google (GOOG)(GOOGL) Chromecast devices.

The Kindle Fire TV is primarily a video streaming product used to stream videos from content providers like Netflix (NFLX), YouTube, and Hulu. It also comes with access to Amazon’s own Instant Video service and access to music service from Amazon MP3, Pandora (P), and TuneIn.

Amazon could integrate Twitch’s technology with Fire TV

Amazon has also developed a few video games for Fire TV. It also sells a gaming controller. So Amazon wants Fire TV to also act like a video game console similar to Xbox and PlayStation.

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Twitch’s acquisition would complement Amazon’s efforts to drive its video game business. Currently, while gamers use Xbox and PlayStation to broadcast their games, most users watch these games on their PCs. According to a report from Qwilt and as the chart above shows, Chrome is the most sought-after platform used to watch games. It’s followed by Firefox and the iPad.

Amazon can easily integrate Twitch’s technology with its own Fire TV console, thereby convincing gamers to use Fire TV to broadcast their video games to other people. This way, the acquisition should also boost Amazon’s own Fire TV sales.

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