Amazon Buys Twitch, But What Is It?

Following rumored acquisition talks with other Silicon Valley bigwigs, video game streaming site Twitch will instead be purchased by Amazon for nearly $1 billion.

While billion-dollar deals are a dime a dozen these days, the uninitiated might be wondering why Amazon would shell out that type of coin for a service that just allows people to watch other people play video games. But a deeper look at the numbers shows that Twitch has caught on to an important, but mostly unexploited, facet of video game culture: it's fun to watch other people play.

So, what is Twitch?

Twitch is a service that allows gamers to stream their video game play for others to watch online. It connects with Xbox, PlayStation, PCs, and mobile gaming platforms. You can check some live gameplay streams right now over at twitch.tv, or check it out in app form on iOS or Android.

Is it really all that popular? Like $1 billion popular?

According to Alexa.com, Twitch.tv is the 166th most popular website in America. But that stat may be deceiving as there are various ways to access the Twitch platform other than the Web.

The network claims it has more than 55 million visitors per month and it's been reported that it is the fourth-largest source for U.S. Internet traffic —that's ahead of Hulu, Facebook, and Pandora. A May report from Sandvine, meanwhile, found that Twitch.tv generates more traffic in the U.S. than HBO GO.

But the more important figures may correspond to Twitch's very dedicated user base. According to numbers released by the company, 58 percent of Twitch users spend more than 20 hours per week on the service and the average age is 21. Those are the type of numbers that can cause any corporate marketing department to salivate.

So, it's just people showing off playing video games?

That's a major part of it, though the service also includes chat and social functions in addition to a library of recorded gameplay.

One of the most impressive numbers to think about is that 99 percent of users watch live streams, while only 25 percent use it to broadcast their gameplay. Video games have become their own form of passive entertainment. According to Twitch, 68 percent of users report decreasing TV viewing to focus on game entertainment. Basically, Twitch has become a new form of TV for many people.

Twitch also came along at just the right time to capitalize on the burgeoning e-sports phenomenon. In addition to gameplay broadcasts, the service also offers video-game centric shows and content.

Does it cost money to use Twitch?

The service is free and ad-supported, though users can also sign up for a "Turbo" subscription for $8.99 a month that removes the ads and provides a bevy of other goodies such as a custom emoticon sets and increased online video storage.

Where did Twitch come from?

The site has been around since 2011 and was originally branded with its website name: Twitch.tv. It was an off-shoot of the since-put-to-rest personal broadcasting medium, Justin.tv.

What the hell is Amazon going to do with all that?

Only Bezos and company know for sure. One might see how a small pivot could allow it to rival YouTube as a video platform with all types of content. But Amazon has been moving into the gaming space of late. It launched Amazon Game Studios in 2012, and purchased gaming studio Double Helix earlier this year. It also released a game controller for its new Fire TV $84.00 at Amazon.