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wouldn't it make more sense to focus on AWS offerings for Unity3D/Unreal Engine instead?

As far as I know Amazon are going to start making their own games as well. Makes sense to use their own engine so they don't have to share any profits.

https://games.amazon.com/

Ah, that explains why. And they might have some VR plays in mind, where it makes sense to have an engine they control

Well, since GameLift is engine agnostic you could use it in any engine, it would just not be so tightly integrated.

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