Twitch
Live-streaming gaming firm Twitch InteractiveTwitch

Amazon has bought gaming firm Twitch Interactive for $970m (£585m, €735m) in cash.

The deal, which amounts to over $1bn in payment, is the largest deal in Amazon's 20-year history.

Founded in 2011, Twitch is an online gaming forum with more than 55 million monthly active users. It represented a whopping 1.35% of all Internet traffic in March, according to networking company Sandvine.

The acquisition was in line with Amazon CEO Jeff Bezos' plan to add video games to the company's portfolio and boost its entertainment services. Amazon currently operates a gaming studio in Seattle, and has been working hard to build video games compatible with its devices such as Fire TV set-top box, Fire Phone and Kindle Fire tablets.

With the plan, Amazon is looking to compete directly with Google and Apple, which dominate the online gaming world through mobile app sales.

Further, Amazon could use Twitch to enter into web video business, competing with Netflix and Google's YouTube.

"Broadcasting and watching gameplay is a global phenomenon, and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month," Bezos said in a statement.

"Being part of Amazon will let us do even more for our community. We will be able to create tools and services faster than we could have independently," said Twitch CEO Emmett Shear.

The deal is expected to close in the second half of the year.

Google was also looking to buy the gaming platform, which is attracting more and more advertising dollars, according to media reports.