this post was submitted on 03 Nov 2024
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You know that Amazon bought Twitch many years ago, right? And they still own it.
I do know that, Amazon could kick them off at any time. Just because Amazon owns the service does not mean that they view it as valuable to use their AWS resources on it. Normally it makes sense to lower costs to do so but if the service isn’t seen as valuable or missteps their admin actions, they could easily end up on the side of the road.
They also exist in this weird space currently where their existence is justified by getting Prime subscriptions up (Prime members get perks on the platform). Now I don’t have their numbers but streaming is ungodly expensive even for Amazon. So I doubt twitch is rolling in a huge pile of cash for them and I doubt they have the Prime numbers to back it up.
Leading to my conclusion that Amazon could say “sink or swim” and kick them off AWS or just sell the company outright since another company would just use AWS anyway and they might make more money that route in fees.
It is true that twitch loses Amazon money, this has been known for years. Yet they are still supported by Amazon. There must be something beyond money that the trillion dollar corporation sees in having absolute control over a major media platform. You focus and argue about checkers while Amazon ignores your cries and continues playing chess.
Seems I’m being misinterpreted badly. I’m saying that Amazon has no monetary interest in Twitch. So yes they’re dependent on an Amazon vision to be able to have that internal access to AWS.
The problem with that is if somehow that vision doesn’t pan out or Twitch steps in the way of it. That was my reason for remarking they’re lucky to be alive. They’re lucky Amazon thinks they have value because the moment they don’t think it, they’re dead without internal AWS support.
Twitch provides value to Amazon by operating at a loss and paying for AWS on the back end, Twitch might appear less profitable (or even operate at a loss), AWS still records revenue from the transactions. You're looking at the surface, where Twitch needs to be individually profitable. Companies use shells like this in far deeper ways for their own tax benefits.
This allows Amazon to shift their tax burden to a company that's operating "at a loss", and keep the revenue with AWS and show record profits.
Companies wouldn't just buy others up, intending that all they do is cause harm. Twitch is being leveraged in deeper ways.
Im not sure why people are disagreeing or downvoting me while also making my point. I said they’re lucky to be alive and I highlighted why. They cannot survive without Amazon or AWS. That was the whole point. Yes they serve some alternate purpose to Amazon surely, but again that’s also a threat.
If for whatever reason they stop serving that purpose (whatever it is) or someone high up stops seeing their value, they’re done for as a business altogether. Because they can’t justify themselves internally much at all and their financials are probably awful. That was my point. And if Amazon decides they’re done with them for whatever reason, they cannot survive without AWS being so cheap for them. Not sure how that point got lost in the sauce.
Taxes are monetary losses. Twitch is providing monetary benefit to Amazon. That is their 'success'. That IS their survival.
AWS is only cheap for them artificially. You keep replying as if Twitch needs to make a profit to be 'successful'. It doesn't. It doesn't need AWS to be artificially cheap either. You're missing the forest for the trees.
The online retail store Amazon actually loses money too, the main generator of profit for Amazon is actually AWS. Every other branch of the business is about market control.