For a man who's selling his company to
In an interview with FORBES, Shear wasn't willing to discuss much regarding his negotiations with the Seattle technology giant--or why things went south with Google. The 31-year-old did, however, outline Twitch's future prospects in working with Amazon and the importance of remaining independent. He also took time to discuss another recent high-profile acquisition in Microsoft's purchase of "Minecraft"-maker, Mojang, and what the future looks like for gaming companies trying to deliver hits. Below is an abridged and edited version of our conversation.
Forbes: Everyone thought you guys were going to link up with
If you want to keep a secret--and we obviously did because you were surprised--you have to keep the circle of people in the know very, very small. We didn’t announce anything internally, and I think that was the right decision in retrospect (laughs.) A lot of employees were surprised as everyone else was about it.
Forbes: How did the employees react when you told them the news?
They were pumped. I was a bit worried because you don’t know how people are going to react to something that’s this big. The reaction was gratifyingly "That’s awesome, how do I get in contact with the people at Amazon?"
Forbes: So what happened with Google? Why did it fall through?
I can't comment about any deal negotiations, sorry.
Forbes: Prior to the deal, what had been Twitch's interaction with Amazon. Have the companies worked together in any capacity?
Amazon has been a good partner for us before in a couple of different ways, historically. We've worked with Amazon affiliates for our partners to try to help them get better deals and get Amazon Play stuff on their channel pages. We do Amazon Fire—we have a Fire app. And we obviously work with [Amazon Web Services]—we use Elastic Cloud Computing (EC2) and Redshift and other AWS products, not right now in our primary video systems, but in some of our secondary systems.
Forbes: Does the deal mean that Twitch will begin to integrate more AWS products into its primary video streaming systems?
AWS is an amazing piece of software. That said, we built our network custom just for live video and as a result—this is going to sound like bragging—it’s the best live video system in the world. I’m not saying we’re not going to use EC2 or AWS, it’s just that that’s a deep technical question that the engineers are going to have to do decide. It’s going to be a matter of, what is their costs basis versus our costs basis and their quality of service versus our quality of service—does it make sense? There’s certainly going to be a bias toward using it because presumably we’re going to get a really good deal on the price. But a good deal on price isn’t free.
This isn’t a deal that Amazon has done because they said, "We can cut costs with synergy and replace pieces of infrastructure." This is a deal where they’re betting on the space and betting on Twitch succeeding.
Forbes: And it's important that you guys will remain independent, right?
Hugely important. It's been comforting hearing from them how they would make that work. You get retained as a fully-owned subsidiary. Those kind of symbolic things have a great meaning. It’s different being the senior vice president of the Twitch division versus being the CEO of Twitch, Inc.
Forbes: Let's talk about another big acquisition in the gaming space with "Minecraft." Did you see that one coming?
I was as surprised anyone else. I think it makes sense. I knew that
If it happens, you always worry would an acquisition: Is the acquired company going to execute on its vision? Are they going to get more resources to do what they’re doing and do it bigger and better, which happens sometimes. Or is the life going to get sucked out of them and they die, which also happens.
"Minecraft" is a real phenomenon. I think that the "Minecraft" game is of equal cultural importance to say Lego and likely to be as enduring and important as Lego, just as Lego is important 30 or 40 years [after its creation.]
Forbes: But how does Microsoft make money off of "Minecraft" and parent company Mojang if it's only one game? Surely, the company needs another hit?
I don’t think they need another title. I think they need to figure out how to make money off the existing title, but there’s the analogy to Lego. Maybe you introduce more sets or launch new elaborations to it that people pay money for. But, Lego didn’t need a new toy every four years to continue to be an amazing brand.
I actually think if you take a step back in the gaming space, we are shifting from a world where you need a new hit every N years to where it's much more like running an internet consumer company. Google doesn’t need a new hit every ten years in the search engine space. That’s true for gaming where you keep investing in that franchise and iterating on it. Creating a new hit is like a tech company launching a new line of business. It happens once every ten years if you’re lucky and it’s worth many, many billions if you do it successfully. That’s the future of gaming. It looks a lot more like "Minecraft" than it does hits-driven single-player game business. Supercell's "Clash of Clans" is a great example of that.
Forbes: And you played that game for a while, right?
Yeah, I used to play. It was literally too addictive, I had to quit. I had to stop playing during meetings and stuff. At some point I said, ‘I want to do more and have serious clan responsibilities.' But I had a job, I couldn't deal with it. I had way too much going on!
Forbes: Any other gaming addictions?
I played "Candy Crush" for 48 hours. I quit when I started visually hallucinating candy appearing in front of my eyes.
If you were to count number of nights lost to just one more turn, it would have to have been the original "Civilization," or really "Civilization II" that maxed it out for me. I was 11 or 12 at the time and there were so many 3 or 4 a.m.'s, eyes bleeding, just one more turns, with my parents telling me "seriously go to bed now."
Forbes: Stepping away from gaming, some people have speculated that by acquiring Twitch, Amazon may be making a play in the live streaming space, outside of video games. Can you see Twitch as a broadcaster for sports, music or other events?
We’ve tested it. We ran a test with [DJ and producer] Steve Aoki and it was successful. We’ve had a lot of requests for other artists and other genres of music, and so philosophically, it can be used for those things. Our worry and the reason why we’ve held off on doing something like that is that the last thing you want to do is take resources away from something you’re doing really, really well.
The event stuff is flashy. We have these e-sports events with Twitch where you have these giant stadiums sell out. We’re selling out Madison Square Garden for a "Dota 2" tournament soon, and that’s awesome. But in the end, that gets back to a very small number in the viewership. The really important thing that happens day in, day out are these interactive smaller streams that aren’t really big events, but are on every day, all the time. The day-to-day interactive content is where it’s at.
I think that if we continue expanding into other verticals, which is far from determined, we’re going to want to take the same approach with Twitch which is really invest in building the best possible experience for one vertical. What made it work in gaming is that we poured resources into making it a great place to stream video games specifically. That’s a critical distinction and not something I’m trying to abandon.
Follow me on Twitter at @RMac18 or email me at rmac@forbes.com.
