YouTube (s GOOG) is about to announce the acquisition of Twitch for $1 billion, according to a Variety report. Twitch, which offers users a way to stream and watch live video game action, would be YouTube’s biggest acquisition to date, and help the Google-owned video service to catch up in the live streaming space. The acquisition is an all-cash deal, according to Variety.

Both companies declined to comment on the story Sunday afternoon. “We don’t comment on rumors or speculation,” a Google spokesperson told us via email, and Twitch’s PR director Chase tweeted the following:

http://www.twitter.com/ChasejustChase/status/468164124111695872 

Twitch, which spun off from the pioneering live streaming service Justin.tv in 2011, has gotten immensely popular with video gamers and their fans, in part due to partnerships with Microsoft (S MSFT) and Sony (S SNE) that allow users of the company’s game consoles to live stream their game play on Twitch. During the…