Azubu, the online eSports streaming platform, has acquired rival service Hitbox for a sum believed to be worth "tens of millions of dollars in cash."
Hitbox, which is based in Austria, confirmed its acquisition in an official statement yesterday - a move that its CEO, Martin Klimscha, acknowledged "might come as a surprise" to its audience. "But I can assure this is a great opportunity," he said. "We chose Azubu because with them we can continue to do what we love most: create great technology for gamers and eSports fans."
There will be no change to the Hitbox service in the near future, but Klimscha said that, together, the two firms would "launch a new platform, focused on optimising the mobile user experience and monetisation technologies, strengthened by our internally developed technologies, technical partner relationships and a passionate team dedicated to pushing the boundaries of video game live streaming."
Of course, it's tempting to see a new platform from these merged eSports streaming services as an attempt to grab a little more of the market from Twitch,which remains dominant in this space. Hitbox has struggled to do so since it was founded by Klimscha and his co-founder Rene Weinberger in 2013, though it did raise $4 million in funding in November 2015.
Azubu, which is based in the US, has seemed a more convincing competitor in the streaming market, raising around $60 million in December 2015. The Hitbox acquisition took place on the watch of the company's "new CEO" Mike McGarvey, an executive who spent 12 years at Eidos and 4 years at OnLive.
There is another wrinkle to this story. The deal's value - "tens of millions of dollars in cash" - came from sources speaking to the Los Angeles Times', as part of a larger piece about Azubu's unstable history. In no small part, sources say, that instability was down to "insufficient attention" from its major investor, Sapinda Group, which "drip-fed" funding at a rate of around $1 million a month. The constrained budget "confused unpaid vendors and frustrated employees with late paychecks." There is even the suggestion of Azubu's "near collapse" last year.
McGarvey's arrival at the company in May 2016 is described as a turning point, with the seasoned veteran cutting monthly expenses in half, reducing headcount from 75 to 50 people, and terminating dozens of contracts with streamers.
"There was some dysfunctional things that happened in the past," McGarvey said. "But there wasn't clarity in what the business was. There's no longer a disconnect. There's full alignment from Sapinda to me and my team."
The full Los Angeles Times article can be found here.