According to a report in GamesBeat published on Thursday, July 24th, Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) has finalized a deal to acquire dominant game-streaming player Twitch. Sources close to the deal say the search giant has agreed to pay more than $1 billion for Twitch.

Google Twitch

The source would not reveal much more other than to say that Twitch investors who participated in past funding rounds are happy that they will be receiving returns that are multiple times the amount they originally invested.

Both Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) and Twitch refused to comment.

Twitch deal will make Google a dominant force in video streaming

Adding Twitch to YouTube would instantly make Google a major player in the video streaming sector. Google acquired YouTube in 2006 for $1.65 billion. The search giant’s YouTube division is reportedly in charge of the acquisition, and the deal could mean a transformation of YouTube’s business.

Any way you look at it, another billion dollar deal in the sector underscores the value of live Internet streaming, and the increasing popularity of competitive gaming as a spectator sport. Competitive gaming today attracts millions of viewers, offers multi-million dollar prize pools forplayers, and provides a multibillion dollar bonanza for advertisers.

More about Twitch

Twitch — based in San Francisco — was founded back in the summer of 2011 by Justin Kan and Emmett Shear, the cofounders of Justin.tv. The business model was to host livestreams, or real-time videos of an event. Shear is CEO of Twitch.

Twitch has had venture capital rounds totaling $35 million from Bessemer Venture Partners, Alsop Louie Partners, WestSummit Capital, Take-Two Interactive Software, Thrive Capital, and Draper Associates.

Twitch lets people broadcast their own gameplay sessions on the PC, Xbox One or PlayStation 4 to other online viewers. The service makes it possible for both competitive gamers and regular players to become temporarily famous by entertaining viewers, who can number in the millions. Twitch represented 1.35% of all Internet traffic in the month of March, according to Sandvine.

As of June, Twitch has more than 50 million monthly active users and more than 1.1 million members who broadcast videos monthly. As of June 2011, Twitch had just 3.2 million monthly active users. Twitch also distributes shows from various partners such as CBS Interactive’s GameSpot, Joystiq, and Destructoid. According to the company, over 13 billion minutes of video are watched every month on Twitch.