Amazon’s Twitch’s agreement with Super Evil MegaCorp
Amazon’s (AMZN) Twitch is venturing into new territory. Twitch is entering the touchscreen MOBA (multiplayer online battle arena). At the end of last month, the Wall Street Journal reported that Twitch would form a league with Super Evil Megacorp, developer of the game Vainglory.
According to the terms of this agreement, for a period of three years, Twitch and Super Evil Megacorp “will co-produce a series of ‘Vainglory’ tournaments for teams that join the league.” The partnership will include broadcasts of games online and in-person viewing of matches at public venues.
According to Amazon’s Twitch, in 2015, its viewers watched people playing Vainglory for a duration of 150 million minutes. At the end of 2014, Twitch had more than 100 million monthly unique users. In 2015, it had 1.7 million unique broadcasters compared to 1.5 million in 2014.
The growth of Twitch
When Amazon acquired Twitch in 2014 for $970 million, Twitch was the fifth-largest video streaming website in the United States after Netflix (NFLX), YouTube, Amazon, and Hulu. Alphabet (GOOG) was also interested in acquiring Twitch.
According to Twitch.tv, the number of monthly unique visitors on its platform rose from 20 million in 2012 to 45 million in 2013 and 100 million in 2014, as you can see in the above graph. This was a CAGR (compound annual growth rate) of more than 50% as gamers bought Microsoft’s (MSFT) Xbox One and Sony’s (SNE) PlayStation 4 with built-in Twitch apps (application).
Amazon makes up 5.6% of the PowerShares QQQ Trust, Series 1 ETF (QQQ). QQQ has 4.8% exposure to the television sector.