Amazon’s Twitch to move into selling games digitally
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Amazon’s Twitch to move into selling games digitally

Twitch Interactive, Amazon’s video game streaming site, which is the company’s first foray into the soon-to-be lucrative world of professional gaming, is about to offer a new service: selling games. Amazon will use the site – which has an impressive 10 million viewers daily – to push further into the $100 billion industry, and deepen its relationship with both professional gamers and their online fans.

As it stands now, Twitch is a kind of online meeting place, where viewers can watch pro gamers take part in competitions live. The added chat function makes Twitch into a kind of streaming site-slash-social media hangout, and has proved popular with users. Now, Amazon is going to start letting people download games from the platform, as well as add-ons like in-game weapons and armour, new characters, and enhanced tools. But the core of the site will remain the live streaming of professional gamers doing what they do best.

There is an element of product placement to this endevour. A viewer should be able to watch his favourite  gamer use a new weapon to devastating effect, and instantly be able to purchase that weapon all through the same platform. Twitch’s Matt McCloskey, vice president of commerce, likens this to being able to buy trainers from LeBron James in the middle of a basketball game.

McCloskey said: “we’re playing with the idea of social commerce, because Twitch is a social platform. Ultimately, the principle is if you can watch it on Twitch, you can buy it on Twitch.”

Michael Pachter, an analyst at Wedbush Securities, suggests that Twitch’s new feature will be popular with game developers because it will let them “convert free players into paying players,” with greater ease. This business model is relatively popular in gaming today. For example, a company releases a game on mobile that is free to play, but players have to pay to unlock later levels, or to acquire special weapons or tools. In this way, the customer is brought into an ecosystem and encouraged to make multiple micro-transactions over the course of a lengthy playtime.

Ultimately, this move will push Twitch further into the Amazon ecommerce machine, and help the latter company (which already has its own gaming division) mount an effective alternative to gaming power-players like Microsoft and Sony.

And eventually Amazon might even come full circle and start selling other goods on Twitch. After all, it already features cooking shows, art classes, and more for those gaming fans who want to take the occasional break from their favourite hobby.

Disclosure
Dominion holds Amazon in its Global Trends Ecommerce Fund.


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