The company says its $99 Amazon Fire TV device has better speed, performance and search functions than other streaming services such as Apple TV and Google Chromecast.
The device, about the size of a CD case, runs Google's Android operating system and offers Netflix, Hulu and other streaming channels in addition to Amazon Prime instant video. It comes with a Bluetooth remote, which lets users conduct voice-enabled searches.
Fire TV also offers music channels like Pandora and "Free Time", a customizable interface for children.
The box, which starts shipping today, will also feature thousands of free and paid games like Minecraft and Disney Pixar's Monsters University starting next month. Games can be played using the remote. An optional Fire game controller will be available for $39.99.
Amazon's announcement comes as the online retailer faces increasing pressure to boost its bottom line after years of furious growth. As more Americans shop online, Amazon has spent heavily to expand its business into new areas - from movie streaming to e-readers and groceries - often at the expense of its profit.
Meanwhile, Amazon.com Inc. has invested heavily on making TV shows and movies available to customers who pay $99 a year for Amazon Prime. Amazon recently boosted the annual fee to $99 from $79 annually. Members benefit from two-day shipping of certain items and access to videos including original series like "Betas" and "Alpha House."
Currently, the service relies on third-party devices like the Roku box to stream its programs to TVs.