The Wizard of Oz animated illustration in Living Classics
The new team created by Amazon will focus on creating "innovative, fun and well-crafted games."
The company's first social game called 'Living Classics' is now available on Facebook.
"We know that many Amazon customers enjoy playing games - including free-to-play social games - and thanks to Amazon's know-how, we believe we can deliver a great, accessible gaming experience that gamers and our customers can play any time," the company said in a statement.
The company's first game, 'Living Classics' was released on Monday. The game features a family of foxes wander into animated illustration of books which include Alice in Wonderland, The Wizard of Oz and King Arthur. Players must help to reunite the foxes by clues in the illustrated scenes.
The game also allows players to visit friends and share rewards.
'Living Social' has a Facebook fan page and users can now play the game for free on Facebook.
Amazon's new presence in the social gaming market could prove to be a dangerous competitor for Zynga. The social gaming company reported a Q2 net income loss of $22.8m at the end of July 2012. Zynga had also reported that booking had dropped 8% compared to the first quarter of 2012.
At a June 2012 press conference, the online gaming company revealed that it's launching its own social network, Zynga with Friends.
The company also announced plans to add a new API layer for developers and third parties in order to provide a more efficient way for Zynga to make game services more social.
"We founded Zynga with a simple premise that we could help people put play back in their lives. We believe that play can become one of the most important ways we make new friends and enhance relationships," said Mark Pincus, founder and CEO of Zynga.
The Zynga with Friends network will connect all the games on the network and allow all players on any platform to easily find other gamers with similar interests and styles including Facebook, iOS, Android and Zynga.com.
Zynga filed with SEC to raise up to $1bn for its IPO on July 1, 2011. The company began trading on NASDAQ in December and was responsible for generating 12% of Facebook revenues in 2011.
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