Amazon raised a lot of eyebrows when it bought the very popular Twitch game-streaming service for $970 million in August 2014.
Why it would spend so much cash for Twitch was a real head-scratcher--live game broadcasts on the internet isn't exactly what you would call core to Amazon's retail business.
It was only on March 16, walking around the Game Developers Conference (GDC), that the penny truly dropped for me.
Amazon's Twitch buy was an investment in bolstering Amazon Web Services (AWS), the company's $7 billion-plus cloud-computing juggernaut.
The conference is the annual gathering of the game-development industry, which hasrecently expanded to include virtual reality. Other events like E3 are the big-media spectacles, but GDC is where business gets done.
Just by walking around the GDC show floor, it quickly became apparent that the biggest companies in tech all see gaming as a massive opportunity.
IBM's SoftLayer hosting subsidiary is here exhibiting, as is Google with Google Cloud Platform and Chromecast. Microsoft is here promoting its Xbox and Windows 10 businesses. Facebook is actually here twice when you count its subsidiary, Oculus VR, having its own separate booth.
And Amazon is here, mainly to promote Amazon Lumberyard, its new service for helping developers build games and host them with the AWS cloud. You may have heard about Lumberyard's terms of service, which say that you can get out of a contract only in the event of a zombie apocalypse.
And right next to the Amazon booth? A Twitch booth, boasting "Twitch Dev Success."
See, Lumberyard and Twitch offer tools to help developers include the game-broadcasting service straight into their apps. It means that game developers can include new tools that let players interact directly with the strangers watching them play and vice versa.
This is intensely desirable for developers: Twitch has 100 million users and counting, with over 7.5 billion minutes of video watched. Getting that massive community engaged with a game can mean the difference between success and failure.
With Facebook, Google, Microsoft, and the like all gunning to get developers to host their games in their clouds, Twitch could be a huge competitive advantage for Amazon Web Services. Microsoft may have the Xbox, but it doesn't own the massive force multiplier that is Twitch's rabid fans.
And with AWS facing intense competitive pressure from Microsoft Azure, a deep integration with Twitch becomes a strategic move to attract as many developers from the lucrative games market as it can.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.