YouTube will spend $1 billion to buy gaming streaming service Twitch. Such a high price should cut off competitors. Experts believe that Google's new acquisition could bring significant profits to the corporation in the future.

YouTube is buying video game streaming service Twitch for $1 billion, Verite magazine reports. The deal will be a record deal in the history of the Google division. An agreement in principle on the sale has already been reached, the publication clarifies. However, the last word, given the popularity of Twitch, will remain with the US Department of Justice.

The Twitch service was launched in June 2011. Specializes in online broadcasting of video games and electronic sports games. At the time of launch, the service attracted investments of $35 million, two years later - another $20 million. This year the company may pass the break-even point. According to internal data, 45 million people visit the portal every month, and about 1 million download videos. The Twitch application is installed on modern Sony Playstation 4 and Xbox One consoles. At its peak, it overtakes companies such as Facebook and Amazon in traffic.

The deal amount - $1 billion - must be paid to the Twitch creators in cash. Thanks to the new acquisition, YouTube will be able to attract a significant audience and deal a significant blow to competitors, says Alexander Baulin, editor-in-chief of the multimedia editorial office at Digit.ru.

“We can talk about a war of video services, at a minimum, so that the extra video service does not go to Yahoo, which also decided to strengthen this area. Therefore, even if Google has its own video service, it is worth taking a closer look at startups that may be of interest to both users and competitors,” believes Baulin.

Promising advertising tools can be brought to life on the streaming service. Twitch could be of interest to YouTube precisely because of this, says Telecom Daily agency analyst Ilya Shatilin.

“The prospect, apparently, is that they are entering a fairly promising niche in terms of audience. One of the ways to monetize the service is that it is a good channel for advertising new games, demonstrations, and other things. Indeed, this is precisely the story about a kind of advertising sales quite promising in the future. Traditional methods of online advertising, it seems to me, no longer work,” Shatilin believes.

Some experts thought the $1 billion price tag for Twitch was too high. Google thus cuts off potential competitors, experts say. The real price of the company can be two or even three times lower.

Alexey Kiselev

“Even if Google has its own video service, it’s worth taking a closer look at startups”