Google’s YouTube has reportedly reached a deal to buy video game streaming company Twitch for more than $1 billion in cash, Variety reports. If completed, the acquisition would be the biggest in the history of YouTube, which Google acquired in 2006 for $1.65 billion.
U.S. regulators will likely challenge the deal, the report says. YouTube is by far the No. 1 Internet video platform, serving more than 6 billion hours of video per month to 1 billion users worldwide, so the Justice Department will likely take a hard look at the deal for anticompetitive issues.
Twitch launched an an arm of the Justin.tv livestreaming service and is focused on gamers. Sony’s PlayStation 4 has supported Twitch streaming since its launch, and it also recently got integrated into Microsoft’s Xbox One. Last year, at the Game Developers Conference, YouTube announced an API to let game developers bake livestreaming capabilities into their games, a clear response to Twitch’s popularity.
Since its inception in 2011, the startup has raised about $35 million in funding. Its investors include Bessemer Venture Partners, Alsop Louie Partners, WestSummit Capital, Take-Two Interactive Software, Thrive Capital and Draper Associates.
In March 2014, Twitch was responsible for 1.35% of all downstream bandwidth on North American fixed-access broadband networks—nearly triple from last fall, according to Sandvine.
Gameplay videos are already massively popular on YouTube, so it’s natural for the company to want to pick up what is probably their biggest competitor.