Twitch, which also lets people broadcast videos of themselves playing and streams professional video-game tournaments, makes money from advertising and from selling subscriptions. The company says that more than 55 million people use its service each month.
And those people spend a lot of time on Twitch. According to Vulture, more than half of Twitch's audience spends more than 20 hours per week using the service.
R.J. Hottovy, lead consumer analyst at Morningstar, said the acquisition could help Amazon advertise to a new and gaming-savvy group of people. Hottovoy also said Amazon could use Twitch's robust streaming technology, not only to bolster the tech behind Amazon's own video services, but also to strengthen Amazon Web Services, the company's huge web-hosting business.
"Amazon finds a way to integrate a lot of the businesses [it acquires] creatively and that's probably the game plan here," Hottovy said. "I think this is just another acquisition that potentially ties the entire business together."
In a letter to members, Twitch CEO Emmett Shear said that Twitch will remain independent.
"We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster," he wrote. "We’re keeping most everything the same: our office, our employees, our brand, and most importantly our independence."
Twitch started as an offshoot of Justin.TV, a "lifecasting" site that began in 2006, according to Vulture. It has become wildly popular since it launched as a standalone site three years ago -- it is actually responsible for more Internet traffic than HBO Go, HBO's streaming video platform, according to Sandvine, a company that makes equipment for broadband networks.
Earlier this year Google was reported to be in talks to acquire Twitch.
“Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month," Jeff Bezos, founder and CEO of Amazon.com, said in a statement announcing the acquisition.
News of the deal was first reported by the technology news site The Information.
This story has been updated with the most recent information about the acquisition.
CORRECTION: An earlier version of this story incorrectly stated that Justin.TV was started in 2005. It was started in 2006.