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Twitch: Amazon's gaming move

Amazon wants to dominate a lot of different industries, from e-commerce to cloud services, and the company is now getting serious about video games.

The company recently paid nearly $1 billion to buy Twitch, a streaming service by which fans watch others play video games. Twitch boasts a community of more than 55 million unique users each month.

"it's a fantastic place to go and talk," Mike Frazzini, vice president of Amazon Games, told CNBC at the GamesBeat conference in San Francisco.

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"It's about socializing around games," he said. "Over time, we'll be looking for ways that we can work with them to help them move faster in what they want to accomplish."

The idea of watching others play video games might sound unusual, but it's becoming a very popular form of entertainment. In fact, Twitch is the fourth-largest source of U.S. Internet traffic behind only Netflix, Google and Apple, according to researcher DeepField.

"You can watch somebody who is a master at a game just like you can with football, but in football you can't replicate it. In games, you actually have a much better shot," said Dean Takahashi, Founder of the GamesBeat Conference.

Amazon now runs its own in-house gaming studio, and it's hiring developers to build games for its Fire TV set top box, Fire phones and Kindle tablets.

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The company is dedicating capital and resources to the gaming industry because it's a big and growing business.

Gartner estimates that worldwide video game revenue reached $93 billion last year. To put that in perspective, box-office sales for movies totaled $36 billion in 2013, according to the Motion Picture Association of America.

By CNBC's Josh Lipton.