Amazon Eyes Living Rooms by Adding Gaming Features to Prime

  • Subscribers will get Twitch benefits as part of membership
  • E-commerce giant’s gaming move poses threat to Microsoft, Sony

Amazon.com Inc. will add video-game streaming features to its $99-a-year Prime membership, expanding its entertainment services while positioning itself to challenge video game console makers Sony Corp. and Microsoft Corp.

Amazon Prime members will receive one free channel subscription on Twitch Interactive, the video-game streaming site the Seattle-based e-commerce giant purchased for about $1 billion in 2014. It’s free to watch people play video games on Twitch. Subscribers pay $5 a month per channel to interact with their favorite streamers in chat rooms and get access to emoticons that are a popular method of communicating on the fast-moving site.

The move to Prime is the biggest integration yet between Amazon and Twitch, highlighting Amazon’s ambitions in gaming. The company on Thursday unveiled three new online, multiplayer games it’s developing through Amazon Game Studios, which is hiring more than 100 people at locations in Seattle and Irvine, California. Amazon sells a gaming version of its Fire TV streaming device, including a gaming controller, for $139.

“When Amazon acquired Twitch, the first thing the community asked was, ‘when will Twitch be bundled in Amazon Prime?’ Twitch Prime answers that question in a way that speaks to our community,” Twitch Chief Executive Officer Emmett Shear said in a statement.

Amazon is setting itself up to challenge gaming console makers Microsoft and Sony by getting Prime members to try Twitch and engage in multiplayer games using Amazon hardware, said Michael Pachter, analyst at Wedbush Securities Inc. Gamers using XBox and PlayStation consoles pay $3.3 billion a year in subscription fees to join multiplayer games online, Pachter estimates. Amazon can develop competing games, sell a less expensive console and include multiplayer online features as part of Prime membership, he said.

“Amazon is showing it wants to get into the gaming business in a big way and it’s using all of the tools at its disposal to entice people to join Prime,” Pachter said. “Ultimately, it will integrate more gaming into Prime membership.”

The announcement that Twitch features would be available to Prime subscribers was made by Shear at TwitchCon in San Diego, the company’s second annual convention where fans can meet their favorite gaming talent. Twitch is known as the ESPN of video games because it streams competitions featuring professional gamers on popular titles such as League of Legends. The site, which attracts 10 million daily users, lets viewers chat alongside the action, react with emojis and pose questions to their favorite gamers.

Last year, Twitch began expanding its focus beyond gaming by adding cooking shows and art classes from some of its 2 million-plus streamers.

Adding Twitch features to Prime membership will help boost its value in the minds of consumers, said Gene Munster, analyst at Piper Jaffray Cos. Most people join Prime for delivery discounts on online orders, but the company is increasingly known for its entertainment options such as video and music streaming and now gaming, which appeals to families, he said.

“Moms want to entertain their kids, which is why Amazon Video has so much content for children,” Munster said. “Twitch provides another way to continue to engage families with Prime memberships.”

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