Amazon acquisition of Twitch contributes to $437m loss

Amazon has reported a third-quarter net loss of $437m, compared to a loss of $41m in the same period last year, with its $1bn acquisition of video game streaming site Twitch and lacklustre sales of its Fire phone contributing to its poor performance.

Twitch: Amazon's $1bn purchase of the video game streaming site has contributed to $437m loss
Twitch: Amazon's $1bn purchase of the video game streaming site has contributed to $437m loss

While the firm also reported that third-quarter sales were up 20% to $20.58bn, its performance is continuing to frustrate investors and analysts wondering when revenue growth will translate to profit.

Q3 operating loss was $544m, compared with $25m in the third quarter of 2013 and the group is forecasting continuing decline.

The news sent Amazon’s share price plummeting 10% in New York yesterday.

Amazon has been investing heavily in innovations, including its new Amazon Fresh grocery delivery service, and spent . Both have contributed to growing expenses at the group, up from $17.1bn last year to $21.1bn.

Last month, , with the phone ringing "off the hook" with brands enquiring about reaching a highly engaged, 94% male audience who watch video games being streamed.

Looking ahead, the ecommerce giant said that it expects to report a worse-than-expected loss in its fourth quarter - which covers the typically strong Christmas period. It said it expects net sales to be between $27.3bn and $30.3bn, growing between 7% and 18% compared to the fourth quarter in 2013. But operating loss is expected to be between $570m and $430m, compared to $510m in the same period last year.

Jeff Bezos, Amazon’s founder and chief executive was, however, typically upbeat when presenting the results. He said: "As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever."

He listed , "low prices" select deals for Prime members, and new proprietary products such as Kindle Voyage and Fire HD Kids Edition.



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