Fire TV Unveiled By Amazon (NASDAQ:AMZN)

Amazon has begun selling a device that allows consumers to watch Amazon’s extensive video library as well as play a wide array of games on their television sets. At a Manhattan news conference held to announce the device, Peter Larsen, Amazon’s vice president for Kindle, said that the set-top device is part of the company’s plan to merge shopping and entertainment. Larsen said, “We’re missionaries about inventing and simplifying on behalf of customers.”

The device, called Fire TV, is part of a multibillion-dollar effort to move from selling goods produced by others to controlling the entire process of creation to sales. James McQuivey, an analyst with Forrester Research, said, “Amazon has a vested interest in making sure it is present at every moment of possible consumption, which is all the time. It wants to get into that television screen and start to build a relationship.”

Amazon is a retailer that makes and sells entertainment and is currently one of the country’s most valuable companies. As physical formats such as books, CDs and DVDs are increasingly being replaced by downloads and streaming, Amazon’s focus is shifting more towards digital content. Amazon is banking on a future in which shopping and video are tightly linked. Amazon has already accomplished this goal with books. Amazon makes e-readers and tablets and then sells the content for them.

However, video is much more competitive. Amazon has to compete with Netflix, which began by renting the same DVDs that Amazon was selling, as well as cable companies and content-streaming providers. William V. Power, an analyst for Robert W. Baird & Company said, “Streaming is the long-term future of video. Amazon needs to capitalize on that. The prize is controlling much of the living room and a big piece of the economy.”

Fire TV is currently priced at $99 and includes content from Amazon’s own studios, licensed content available through Amazon Prime, and content from established players like Hulu and Netflix. The device can also be used to play games with the purchase of a separate $40 controller. The games available include a version of the extremely popular Minecraft.

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