Why it matters: Google, Nvidia, and to an extent Microsoft have all thrown their hats into the ring for cloud game streaming. However, Amazon is the market leader in cloud computing so it stands to reason that the company would develop a cloud gaming solution. Amazon is hoping that its focus on cloud gaming and game development combined with its Twitch dominance will bring more gamers into the Amazon ecosystem.

Cloud gaming is slowly becoming a thing with big tech companies including Microsoft, Google, Sony, and Nvidia all having some version of the technology. Amazon is also poised to leverage its vast cloud infrastructure to include gaming. However, Amazon is not only doing cloud gaming according to the New York Times, but wants to expand into game development as well.

Unlike Microsoft's xCloud or Nvidia's GeForce Now, Project Tango is more like Google Stadia in that all gaming is done wholly in the cloud. There will be no downloads or physical hardware needed to play, just an internet connection to Amazon Web Services (AWS).

However, Amazon's ambitions aren't limited to allowing customers to game anywhere they want. The company is looking to push into game development itself. The company already has Amazon Game Studios which released Air Patriots back in 2012 and teamed up with Athlon Games on a free-to-play Lord of the Rings MMO last year. Two titles that are scheduled to be released in the coming months are Crucible and New World. We first heard about the titles at TwitchCon 2016 but are expected to be released in April and May 2020, respectively.

Crucible is a third-person shooter developed by Amazon's Relentless Studios, where teams of six battle each other. The twist is that players can switch sides at any time to double-cross their team. Furthermore, there is a "game master" role that can interfere with the match and influence the outcome.

New World is billed as an MMO set in an alternate 17th century America with elements of fantasy. The game showcases Amazon's Lumberyard game engine that takes advantage of AWS to power massive multiplayer battles.

Both games will release on conventional platforms with the long-term goal being Project Tempo.

“The big picture is about trying to take the best of Amazon and bringing it to games,” said Mike Frazzini, Amazon’s vice president for game services and studios, who is largely directing the games strategy. “We have been working for a while, but it takes a long time to make games, and we’re bringing a lot of Amazon practices to making games.”

Like Amazon's Echo devices and Prime services, the goal is to encourage consumers to join the Amazon ecosystem. The gaming market is expected to be a $300 billion industry by 2025 and Amazon is well positioned to grab a piece of that pie. The company has the largest market share of cloud computing with AWS and the largest market share of game streaming with Twitch. Look for Amazon to combine the two as it takes on established giants in the video game industry.

In fact, Amazon plans to introduce "interactive games" on Twitch this summer. This will apparently allow Twitch viewers to play games with their favorite streamers at the same time. “We love this idea that you have a player, a streamer and a viewer all sharing in this synchronous interactive environment of Twitch,” Mr. Frazzini said.