Peter Larsen Amazon Fire Announcement
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Amazon.com launched an Internet video-streaming and gaming device — the $99 Fire TV — as the e-retailing giant looks to grab a spot in the living room to promote its own content services and get an edge on rivals including Apple and Netflix.

As expected, Fire TV will stream Amazon’s Instant Video and Prime Instant Video, the unlimited movie and TV service available through its free-shipping program. It will also provide access to Netflix, Hulu Plus, YouTube and other video services including WatchESPN, Vevo, Pandora and Showtime Anytime, as well as games, apps and photos.

Peter Larsen, head of Amazon’s Kindle division, said the new device will provide better search, faster performance and access to more content services than current options on the market like Apple TV, Google’s Chromecast and Roku boxes. All told, Fire TV has three times the performance of each of those devices, he claimed.

“This is a powerful device,” Larsen said, at the company’s launch event today in New York. “It’s the best way to watch Netflix… This isn’t a closed ecosystem.”

The device goes on sale today. Eligible customers will get a free 30-day trial of Amazon Prime — which the company just hiked 25%, to $99 per year — when they purchase a Fire TV. Also key: Fire TV will ship preregistered with customers’ Amazon account, so they can start buying TV shows or movies, or start streaming Prime Instant Video, right away.

SEE ALSO: Amazon’s Fire TV Box: No-Brainer Strategy, But Will It Light Up Retailer’s Revenue?

The square (4.5-by-4.5-inch) device is 0.7-inch high, so it fits comfortably anywhere in an entertainment center or behind a TV, Larsen said. The Android-based box supports 1080p video, and sports a quad-core processor, a dedicated graphics processing unit and 2 gigabytes of memory. The device includes a Bluetooth-enabled remote control, and has a predictive-analysis feature dubbed “ASAP” to guess what TV show or movie title a user will watch next. Fire TV also supports voice-recognition to search for content.

Larsen said Amazon has invested “hundreds of millions of dollars” in content since 2011, which includes several exclusive pacts for TV shows including Fox’s “24,” CBS’s “Under the Dome” and kids’ far from Nickelodeon. He also touted Amazon Studios’ original series, including John Goodman-starrer “Alpha House,” and the just-greenlit “The After” from Chris Carter and dramedy “Mozart in the Jungle.”

Other video apps available on Fire TV include Time Warner’s Flixster, Vimeo, Bloomberg TV, Sony’s Crackle, Plex, Red Bull TV, Qello Concerts and RealNetworks’ RealPlayer Cloud. HBO Go is currently absent from the lineup. (UPDATE: Amazon said it’s working with HBO to make the service available on Fire TV, while an HBO rep said premium cabler has “no plans at this time to be on it.”) Amazon said additional services including WWE Network, MLB.TV, Watch Disney Channel, Watch ABC and Twitch will be coming soon.

SEE ALSO: Amazon Greenlights 6 Series, Including Chris Carter’s ‘The After,’ and Renews ‘Alpha House’

Amazon Fire TV is also a game machine. The device has an optional $39.99 game controller, and next month Amazon will offer thousands of games on the box, including “Minecraft,” “Monsters University,” “The Game of Life,” “The Walking Dead,” “NBA2K14,” “Asphalt 8: Airborne” and “Despicable Me: Minion Rush.” The company said it has deals to bring games from Disney, EA, Gameloft, Ubisoft, Sega, Telltale and others to the device. The average price of a paid game will be $1.85, and there will be more than 1,000 games that are free to play.

In addition, Amazon Game Studios is developing games from the ground up for Fire TV. Execs showed a demo of “Sev Zero,” a first-person shooter set in outer space. It’s available for $6.99 (free with purchase of the Fire game controller).

Next month, Amazon will add the ability to stream music purchased from the e-retailer with lyrics synchronized on the TV screen. FreeTime, a feature Amazon developed for the Kindle tablets to manage the content kids can access on tablets, will also come to Fire TV to let parents “white-list” content on the set-top box.

Fire TV includes features that work with Kindle tablets, too. A mirroring feature displays what’s on a Kindle Fire HDX on TV. A “fling” icon on the tablet sends video or audio to the big screen, and the X-Ray feature, powered by IMDb, lets users access in-scene info on characters, trivia, music and more.

The Amazon box will compete primarily with the $99 Apple TV, the $35 Chromecast and Roku (whose devices range from $50-$100). Those three devices each provide access to Netflix, YouTube, Hulu Plus and HBO Go; Amazon’s video services are currently only on Roku. It’s also positioned as a gaming device to challenge Xbox and PlayStation.

But with the connected-TV hardware play, Amazon also is aiming to give itself real estate on big-screen HDTVs to feature its media services. The company’s chief competitor in electronic sell-through is Apple, and Amazon is spending heavily to bring original and exclusive series to challenge SVOD leader Netflix.

The Apple TV business generated more than $1 billion in revenue last year, according to CEO Tim Cook. That figure includes both hardware sales and content sold through the boxes.

At this point, there’s a big opportunity for Amazon to carve out share in the fast-growing market. About 14% of U.S. broadband households had a streaming-video media device like a Roku or Apple TV in 2013, according to Parks Associates. Overall, the research firm projects sales of connected-TV devices, including streaming players, smart TVs, videogame consoles and other products, to reach 330 million annually by 2017, nearly double units shipped in 2013.

Amazon’s launch of Fire TV come after its successful foray into the tablet space with the Kindle, which provides access to video, books, songs, apps and other content purchased through the e-commerce portal. The company sold an estimated $4.5 billion worth of Kindle e-readers and tablets in 2013 and is projected to hit $5 billion in Kindle device sales this year, according to Morgan Stanley.

The e-retailer’s ad campaign for Fire TV will feature thesp Gary Busey. Amazon screened a clip showing a wild-eyed Busey screaming at a Roku screen, “Find Gary Busey!” — then speaking calmly into the Fire TV’s remote to pull up search results with movies he’s appeared in. (Watch the clip here.)

Reports of Amazon’s project to create a set-top surfaced last year. It reportedly had been shooting to launch a connected-TV device in late 2013, but evidently missed the window on the holiday-shopping season.

Amazon held the announcement at Manhattan’s Milk Studios, replete with a living-room set centered around a gigantic central HDTV and flanked by two other screens. Event had a movie theme with posters lining the walls and Amazon doled out popcorn and candy to attendees.

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