The Amazon Fire TV device, which fits in one's hand and connects to television sets, aims to boost the US online company's efforts to capture viewers for its Prime Video service.
"It's a tiny box with huge specs," said Amazon Kindle vice president Peter Larsen at a New York event unveiling the device.
The box along with a remote control allows users to listen to music or to play games with a separate controller device.
Larsen said that existing devices "make streaming today too frustrating" and that Fire TV would simplify the experience.
The Fire TV box goes on sale to US consumers for US$99, with the game controller sold at US$39.99.
The device puts Amazon on track to challenge Google's Chromecast stick and the streaming media boxes from other groups such as Roku.
Amazon said that because the device uses open source, it allows consumers to watch video from rivals including Netflix and Hulu.
"This tiny box, has huge specs, tons of content, incredible price and people are going to love Fire TV," said Amazon founder Jeff Bezos in a statement.
"Voice search that actually works means no more typing on an alphabet grid. Our exclusive new ASAP feature predicts the shows you'll want to watch and gets them ready to stream instantly. And our open approach gives you not just Amazon Instant Video and Prime Instant Video, but also Netflix, Hulu Plus, and more. On Fire TV you can watch (Amazon's original programme) Alpha House and (Netflix's) House of Cards."
The news comes days after Amazon unveiled a boost to its original offerings with six new programmes to be produced in its studios.
The online streaming service is available to members of Amazon Prime, a subscription service which also offers benefits for retail shopping.
Amazon also said this week it had secured the online streaming rights for the US action hit "24" starring Kiefer Sutherland, which ran for eight season.
According to the research firm eMarketer, there were 186.2m digital video viewers in the US in 2013, an 8.5% increase from 2012. That figure represented just more than three-quarters of all Internet users.
Amazon said it has worked with game developers including Electronic Arts, Disney, Gameloft, Ubisoft, Telltale, Mojang, 2K, and Sega to bring their games to Fire TV.
"Over 100 games are available starting today and optimised for Fire TV, with thousands of additional games coming next month with the Fire TV app, which brings controls for touch-enabled games," the company said in a statement.
"These are great games for such a small box and at such surprisingly low prices - the average price of paid games is US$1.85," the company added.
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