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Forbes/YouTube

Explainer: Why did Amazon spend $970 million on a site that livestreams videogames?

Turns out watching people play videogames is more lucrative than you think.

IF YOU’RE A gamer, then the news that Amazon bought gaming site Twitch for $970 million last night will have been of significant interest.

For those following the site’s progress, it’s a surprise that it wasn’t Google that bought it, especially since many concluded that the deal was already done.

For everyone else, you may be confused as to why Amazon would pay so much for a site that’s all about watching people play games. So what exactly is Twitch and why would Amazon pay so much for it?

So what exactly is Twitch?

Twitch is a livestreaming gaming site which was founded three years ago by the people behind Justin.tv, another livestreaming site that was recently shut down.

The majority of video content consists of players streaming playthroughs of games while commentating, but there are also live shows and livestreaming esports events.

Multiplayer games like Defence of the Ancients 2 (DotA 2), an online battle arena game, are incredibly popular and sees a number of competitions held around it, the latest one in July having a prize pool worth $11 million.

Forbes / YouTube

Some of the most popular games featured on it are non-linear, mainly games like Minecraft – a sandbox game that encourages so much creativity and originality, it deserves its own explainer – and online multiplayer games like League of Legends and Counter-Strike.

Watching someone play a game may not sound captivating, but there’s a significant audience there. Last month, the site had more than 55 million visitors and more than one million users uploaded video content to the site last month.

All content on the site is user-generated (something we’ll touch upon later) and can be viewed later, making it like a specialised version of YouTube.

While livestreaming games like Minecraft is the site’s bread and butter, the site has had a number of breakaway hits in recent times. The most popular example was Twitch Plays Pokémon, which had viewers control the protagonist of Pokémon Red game through chat commands.
1.16 million people participated – 121,000 people being the most playing at the one time – and the game was completed after 16 days (although not before the creator introduced a democracy mode to help progress).

With videos like that, no wonder Amazon paid so much for it!

I’m detecting sarcasm in that statement.

But seriously, do you not think it’s strange that Amazon spent almost a billion dollars on a site that’s about watching people play video games?

If you never heard of it before, then the confusion is understandable, but gaming on video has developed significantly in recent years.

On traditional media, there were few, if any, opportunities for gaming to have a space. Normally, their inclusion was limited to a very general explainer of what videogames are, or discussing controversies surrounding certain games like the Grand Theft Auto series. In short, public perception on it has been narrow.

Twitch games Some of the more popular games being livestreamed through Twitch. Twitch.tv Twitch.tv

Online, that stigma doesn’t exist and through sites like Twitch and YouTube, gaming and the people who play them have been given a platform to grow and develop. As a result, many gaming personalities and channels have emerged and have developed significant followings.

The obvious one would be PewDiePie who has 30 million subscribers, but there are many others channels like Sky Does Minecraft (10.3 million) StampyLongHead (3.5 million) Game Grumps (1.7 million) JonTron ( 1.19 million) and Cinemassacre (1.5 million) just to name a few.

If a person or group is entertaining or interesting enough, then it turns a normal gaming feed into something more, and if a game is non-linear, it allows a degree of unpredictability which adds to the fun.

PewDiePie / YouTube

There’s a very good reason why gaming is one of the main categories on YouTube and why Google was reportedly close to buying it.

People aren’t watching livestreams simply because a game is being played, it’s usually because they’re watching someone experienced play, or a group who are able to joke around and enjoy the game.

So why go for Amazon, and not Google?

Since Google already had YouTube, which is a more recognisable brand than Twitch, the fear that the latter would be absorbed and integrated into YouTube was likely a concern. The CEO of Twitch, Emmett Shaer, said in a statement that (emphasis our own):

We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster. We’re keeping most (sic) everything the same: our office, our employees, our brand, and most importantly our independence. But with Amazon’s support we’ll have the resources to bring you an even better Twitch.

Considering how long Google was reportedly in talks with Twitch and how it was going to pay $1 billion as well, it more likely that Twitch opted for the company that will allow it to better stick to its original vision.

IMG_7533 One of the world finals for DotA 2, where the top teams globally competed against each other. The competition provided a prize pool worth approximately $11 million. Jakob Wells / Flickr Jakob Wells / Flickr / Flickr

And what does Amazon get out of this?

To understand that, you need to realise that for years now, Amazon has been trying to position itself not only as an online shopping destination, but as a major media organisation.

The company already has Prime Instant Video, its rival to Netflix, and what Twitch adds to this is an entry to another lucrative market, the gaming industry, where it’s expected that sales will reach $64 billion globally.

Also, take into consideration that the breakdown of male and female gamers isn’t as lopsided as you think – in a recent study in the US, it found that female gamers made up almost half of all gamers in the country – and Twitch’s reach is broader and more diverse than you would initially expect.

And how does that tie into Amazon’s own products?

Since all the content on the site is user-generated, it means that Amazon has access to hours upon hours of gaming content, which could be used to market games.

Modern games are expensive and while gamers are an audience with disposable income, watching someone they like play a game could easily convince them to buy it themselves, or if they are unsure, gives them a feel for it.

Most game developers already realise this and offer previews or beta versions of their games to the most popular gaming channels as a way of generating interest.

It’s not unreasonable to think that Amazon might want to go down this path eventually, especially since it has an in-house gaming studio and a console in the form of Fire TV.

AmazonGameStudios / YouTube

Ok, so what happens now?

Well, it’s business as usual for Twitch so you could probably watch one of the livestreams happening now. Might we recommend Fish Play Street Fighter, where two goldfish play Street Fighter II? It’s strangely entertaining.

Read: Opinion: Will the push to encourage more science and technology graduates be worth it? >

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6 Comments
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    Mute Martin Bishop
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    Nov 21st 2024, 3:20 PM

    It’s not coming up at the doors because abortion is considered a settled matter by the vast majority of the country, we voted to stop restricting women’s healthcare.

    Aontú are really a one-issue party, they were formed purely on the abortion issue and its their number one priority above all else.

    One trick party’s are a danger to a country just look at the UK with UKIP and Brexit…they got what they wanted and it hurt people and then they didn’t know what else to do.

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    Mute Brian D'Arcy
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    Nov 21st 2024, 3:41 PM

    @Martin Bishop: No surprise, he ignored Sinn Féin members voting to support legislation for abortion for two years and then left whem he realised that he couldn’t change it so ignoring the consensus of support by the vast majority in the Republic is no great surprise.

    89
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    Mute brendan hackett
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    Nov 21st 2024, 4:47 PM

    @William Slevin: If you know of anyone who might have committed a murder, you should be reporting this to the Gardaí.

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    Mute Gerry Lamont
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    Nov 21st 2024, 4:48 PM

    @William Slevin: Hopefully this country will never take the backward step you wish for. A step which allowed Savita Halappanavar to die needlessly.Your opinion is your opinion but do not force your beliefs onto others. Ireland has had to put up with enough of this clergy enforced rubbish to last an eternity.

    95
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    Mute FoxyBoiiYT
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    Nov 21st 2024, 4:50 PM

    @William Slevin: Don’t trust the electorate to get it right? Typical BS from you. Irish people voted overwhelmingly to allow abortion, ye lost BADLY and never stopped moaning. You love talking down to people, a perfect match to Peadar

    67
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    Mute Eugene Comaskey
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    Nov 21st 2024, 4:54 PM

    @Martin Bishop: Well it is very evident to me that you are not well read in Dail reports or the happening in the Dail every day. Toibin is the one TD that holds the Government to account every time . He , along with some very good Independents are the real opposition. Toibin is by a mile the best speaker and worker in the Dail.

    39
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    Mute Nemethon
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    Nov 21st 2024, 5:23 PM

    @William Slevin: William, neither you nor I will ever face the personal decision of whether to have an abortion. That choice belongs solely to the woman. While it takes two to create a pregnancy, it is the woman who bears the physical and emotional weight, and ultimately, the responsibility of deciding what’s best for her.

    I am, and always will be, pro-choice because I believe in respecting women’s right to decide for themselves. They have the right to choose whether to continue a pregnancy or seek an abortion, and that decision deserves our respect, even if it differs from our personal

    53
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    Mute A W
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    Nov 21st 2024, 6:11 PM

    @William Slevin: can we start rising children under trees if can afford cost of feeding them… ..

    2
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    Mute Freda Peeple
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    Nov 21st 2024, 6:13 PM

    @William Slevin: Back in your box little Willy, you are an opinionated Old Testament type, no one wants to hear your warblings you frustrated old melt.

    32
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    Mute A W
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    Nov 21st 2024, 6:14 PM

    @William Slevin: man’s issues dooo

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    Mute Tired Jim
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    Nov 21st 2024, 6:50 PM

    @Gerry Lamont: she died of sepsis, it’s officially declared on a HSE report

    14
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    Mute brendan hackett
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    Nov 21st 2024, 8:24 PM

    @William Slevin: No matter what you think, abortion is not murder. End of.

    16
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    Mute Paul Fahey
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    Nov 21st 2024, 8:30 PM

    @William Slevin: actually 33.4% of the population did NOT vote against abortion, nice attempt to inflate the number though.

    11
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    Mute Richard Hennessy
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    Nov 21st 2024, 10:50 PM

    @William Slevin: hopefully with modern birth control u might not get pregnant William

    10
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    Mute Setanta O'Toole
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    Nov 21st 2024, 11:05 PM

    @William Slevin: some man to pontificate over ‘trusting the electorate’ when you are moaning about the will of 68% of the people.

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    Mute Regular John
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    Nov 22nd 2024, 1:32 AM

    @Richard Hennessy:
    Nobody should get pregnant these days if they don’t want to. There are numerous options for contraception, abortion shouldn’t be one of them.

    7
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    Mute Regular John
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    Nov 22nd 2024, 1:39 AM

    @Paul Fahey:
    It was 33.1%. Do you really think anyone would try to inflate the number by 0.3% ?

    5
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    Mute Regular John
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    Nov 22nd 2024, 1:41 AM

    @brendan hackett:
    100% of aborted babies disagree…

    5
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    Mute Donal Sweeney
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    Nov 22nd 2024, 12:25 PM

    @Tired Jim: it’s a well documented fact she asked for a termination,was refused,sepsis then set in from which she died

    2
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    Mute Fiona Wyse
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    Nov 21st 2024, 3:28 PM

    This saddens me, Eimer Tobin does absolutely sterling work in my area on the issue of public transport, with which we are having massive problems. However, I cannot give my vote to her because it just doesn’t align with my own thoughts on abortion. I absolutely do not have the right to tell another woman how many children she should have and, if she should bear a child with a severe physical disability which is going to impact greatly on her life and, the life of her existing children.

    193
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    Mute K O
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    Nov 21st 2024, 3:37 PM

    @Fiona Wyse: we say how the lady in America as a one trick pony got on.

    10
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    Mute Adam H2022
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    Nov 21st 2024, 9:33 PM

    @Fiona Wyse: Sounds like something Hitler would say when you talk about disabled children. The WOKE left in this country are really terrifying at times the way they speak.

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    Mute Regular John
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    Nov 22nd 2024, 1:53 AM

    @Fiona Wyse:
    Nobody is telling anyone how many children to have. Have you never heard of contraception?

    8
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    Mute Thesaltyurchin
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    Nov 22nd 2024, 9:09 AM

    @Adam H2022: Lol! *dont tred on me* but like do what i say

    1
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    Mute pauley870
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    Nov 22nd 2024, 10:08 AM

    @Fiona Wyse: we’ll said Fiona,we now have 20,000 babies exterminations a year,let’s try and increase this to 30.000

    4
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    Mute marie hynes
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    Nov 23rd 2024, 7:20 AM

    @Adam H2022: there are no disability or respite for families or support for carers on this county. If you want to help disabled children so much or judge woman who v make decisions for their habits, maybe make the life of families with disabled coldhearted bearable and not punish them with means tested carers allowance, no respite or services for their disabled child?

    2
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    Mute Frank Mc Carthy
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    Nov 21st 2024, 3:13 PM

    Oh man, launching the BIG MANIFESTO without actually having said manifesto to hand / printed——– OOCH!!!

    77
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    Mute Kevvy kerrr
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    Nov 21st 2024, 3:22 PM

    @Frank Mc Carthy: a fairly schoolboy error alright. Obviously, Peader was impressive & on the money for those ill thought out badly worded referendums earlier this year & he did well in that ’10 peader’ debate last week but, all in all, shouldn’t every party have their manifesto out there long before 8 days to the polling booth???

    37
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    Mute Kevvy kerrr
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    Nov 21st 2024, 3:24 PM

    @Kevvy kerrr: ’10 LEADER’ debate, damn predictive text

    12
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    Mute Chaotic State
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    Nov 21st 2024, 4:37 PM

    How can Aontu and leader Peadar Tobin
    be trusted on any of the big issues facing the country when they refuse to accept the result of the referendum held in 2018 when the majority of the people voted to amend the constitution on abortion.
    In an Trump like move, Peadar has stated that if elected he will push to introduce amendments to the current legislation on abortion in an effort to undermine the will of the majority of the people.
    Regardless of Aontu policy on all other issues, the very fact that their party aim to overrun the referendum held in 2018 should trigger a warning light in the minds of the electorate.

    74
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    Mute john salmon
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    Nov 21st 2024, 4:59 PM

    @Chaotic State: he doesn’t have to agree with the results of a referendum and is perfectly entitled to try to get his views into law using democratic means. That’s what voting is all about .

    63
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    Mute Nodon
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    Nov 21st 2024, 5:26 PM

    @Chaotic State:The factors that influenced a yes vote in 2018 were the commitment to a three day wait period a twelve week limit. Aren’t those parties and candidates who are now proposing to abolish those also rejecting the will of the people.

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    Mute Con Cussed
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    Nov 21st 2024, 7:54 PM

    @William Slevin: You are writing through the rear end of you a_us. Accept the democratic rights of others and move on. You and your Trump crew are the most undemocratic bunch of i__ots!

    11
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    Mute Regular John
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    Nov 22nd 2024, 1:57 AM

    @Con Cussed: Do you respect the fact that Trump won the US presidential election? It sounds like you don’t.

    6
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    Mute Dermot Blaine
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    Nov 21st 2024, 3:18 PM

    Another pro-life shinner. Is irony dead?
    1 TD, 8 councillors, no MEPs and 2000 members in the 32 counties. Barely counts as a party yet he is never off the airwaves or the telly. There are bigger groupings in the Dail that get virtually no coverage.

    68
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    Mute Brendan O'Brien
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    Nov 21st 2024, 3:21 PM

    @Dermot Blaine: I see that Aontú’s website refers to ‘the south of Ireland’ and ‘the north of Ireland’ – Peadar must forget that he quit the ‘Republican Movement’ at times.

    33
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    Mute K O
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    Nov 21st 2024, 3:36 PM

    @Brendan O’Brien: Dah! He’s factually correct!

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    Mute Brendan O'Brien
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    Nov 21st 2024, 3:37 PM

    @K O: Malin Head is in the south?

    9
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    Mute Sara McSweeney
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    Nov 21st 2024, 4:20 PM

    @K O: it’s Ireland and Northern Ireland

    7
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    Mute Dermot Blaine
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    Nov 21st 2024, 4:22 PM

    @Sara McSweeney: Shinners won’t use the term Northern Ireland.

    5
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    Mute Stanley Marsh
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    Nov 21st 2024, 4:32 PM

    @K O: Yes, always greatly amused me that the furthest part of the ‘south’ that is north is further north that the furthest part of the ‘north’ is north.

    Maybe ‘Northern Ireland’ should have been called ‘North Eastern Ireland’ for clarity.

    6
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    Mute Sheila McNulty
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    Nov 21st 2024, 4:34 PM

    @Brendan O’Brien: but thats what the majority of people of people say Northern Ireland Southern Ireland

    6
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    Mute Brendan O'Brien
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    Nov 21st 2024, 4:36 PM

    @Sheila McNulty: That’s not what Aontú say.

    1
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    Mute Daniel Roche
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    Nov 21st 2024, 4:54 PM

    @Brendan O’Brien: Aontù is a republican party.

    6
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    Mute Daniel Roche
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    Nov 21st 2024, 5:00 PM

    @Sara McSweeney: The north of Ireland is part of Ireland.

    8
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    Mute A W
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    Nov 21st 2024, 6:21 PM

    @Sara McSweeney: will be nord of Ireland’s soo ssoon…
    Becouse
    thushnamies coming from afriko or asia etc…
    Also 7 or 10mill not much diff as
    stiilll we too small toobe divided against orange and apples…by from scenarios of top of 0000.1oldmuney

    1
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    Mute Dermot Blaine
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    Nov 21st 2024, 9:53 PM

    @William Slevin: I didn’t say anything to you, I pointed out that Aontu are barely a political party in my comment, not aimed at anyone in particular. Not sure what comment I’m meant to have on copy and paste

    3
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    Mute Fidgenti
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    Nov 22nd 2024, 7:55 AM

    @A W: So you failed English in the Leaving Cert I presume. I’ve heard a better standard of English being spoken in tents along the canal than this drivel you’re spewing.

    1
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    Mute JoeJoe Kilbride
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    Nov 24th 2024, 11:52 AM

    @Sheila McNulty: no, only people from Northern Ireland refer to Ireland as ‘Southern Ireland’

    1
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    Mute Eileen McGoldrick
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    Nov 21st 2024, 4:39 PM

    I raised the abortion stance with him when he called to my door on Tuesday afternoon so I’m disappointed to hear that statement. It is the main reason that I won’t vote for his party.

    37
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    Mute Frank O'Hara
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    Nov 21st 2024, 5:50 PM

    Not terrible, but I wish that Toibin would have taken a stronger stance on stopping parties who are running for election like Labour and Fine Gael from introducing abortion up until birth as well as repealing the nasty 12-week legislation. For too long, the Irish people have been tricked into believing that abortions are harmless because the vocabulary has been changed sneakily (unborn child to foetus, partial-birth abortion to late-term abortion etc.) and those who claim to be “pro-choice” don’t want a woman to have the right to know just what they are choosing. FG and FF keep blocking legislation to allow doctors to show women exactly what an abortion looks like. Even still photographs of aborted babies have been banned as well. They want to control the discourse and normalise abortion.

    28
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    Mute Wolfgang Bonow
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    Nov 21st 2024, 6:30 PM

    @Frank O’Hara: Is that you, William?
    Can you provide a source for “introducing abortion up until birth” ?
    A foetus is the medical term for an unborn baby, starting at the 11th week.
    What’s your problem with using a correct, scientific language?
    Unless, you think people are in general too “slow” to know – but, then they shouldn’t be able to vote at all, correct?

    23
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    Mute Frank O'Hara
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    Nov 21st 2024, 6:50 PM

    @Wolfgang Bonow: William who? Numerous Labour, Social Democrat, Fianna Fáil and Fine Gael politicians have stated that they support legalising abortion up until birth by removing all limits. In fact, Labour and the Social Democrats went a step further and have even openly included it in their manifestos. Life begins at conception, it is an unborn child, not a foetus. That’s why when you murder a pregnant woman, you are charged with double murder. Do you know why doctors don’t remove the baby completely when dismembering the body in a partial-birth abortion? They would be charged with murder if they did because the baby can survive outside the womb. Abortion is barbaric, it involves severing limbs of the unborn child and sucking the baby’s brains out via tubes inserted into the womb.

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    Mute Regular John
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    Nov 22nd 2024, 2:04 AM

    @Frank O’Hara:
    Shhhh… Don’t tell people what abortion actually involves, you need to refer to babies as clumps of cells or something also.

    5
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    Mute Peter O'Muiri
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    Nov 21st 2024, 7:31 PM

    Abortion is a settled matter for the vast majority of the electorate who voted in a relatively recent referendum to liberalise the law subject to certain safeguards.The so-called review of the legislation, carried out by an abortion advocate and pal of Minister for People Sleeping on the Streets, O Gorman, is DOA, having failed to achieve a consensus of TDs to implement its predictable and one- sided recommendations.

    13
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    Mute Bertie
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    Nov 21st 2024, 4:46 PM

    For this very reason I won’t be voting any of the one trick pony minority parties or independents, we will have a coalition with two of the big three, SF FF FG, take your pick of two of them

    13
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    Mute P. V. Aglue
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    Nov 21st 2024, 3:26 PM

    Euthanasia is next thing coming, he should get out ahead of the other parties by being pro euthanasia/right to die

    12
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    Mute Martin Bishop
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    Nov 21st 2024, 3:27 PM

    @P. V. Aglue: nah, he’d rather people suffer against their will I’d say.

    LIfe…….at any cost.

    48
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    Mute Regular John
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    Nov 22nd 2024, 1:49 AM

    @Martin Bishop:
    Like a baby being aborted suffers against their will ?

    7
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    Mute Tired Jim
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    Nov 21st 2024, 6:45 PM

    Publicans don’t care how smashed out of your head you are, as long as you can stagger up to the bar and open your wallet, they’ll keep pulling the pints, drinking at home is much cheaper and less boring

    7
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    Mute AnthonyK
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    Nov 21st 2024, 10:31 PM

    It doesn’t come up because if you mention your view to the wrong person you will be looked upon as being right wing reactionary or left wing murderer.

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    Mute James Gorman
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    Nov 22nd 2024, 7:49 AM

    Toibin believes women in crisis pregnancies choose abortion because they can’t afford to raise the child. Seriously he said that.

    3
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    Mute Thesaltyurchin
    Favourite Thesaltyurchin
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    Nov 22nd 2024, 9:13 AM

    Extract fantasy from logic, palpable overbites in this party, have to be careful with religious zealotry.

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    Mute Derick R M
    Favourite Derick R M
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    Nov 21st 2024, 6:53 PM

    The SF vs Aontu arguments here are a great spectator sport. That saying ‘narcissism of small differences’ springs to mind.

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