In order to play the Osmo games on the 7th Generation Fire 7 and 8, the legs in the base must be extended.
HOW TO EXTEND:
In order to extend the base legs, you need to pull the leg out while keeping the button pressed.
HOW TO RETRACT/SHORTEN:
To shorten the base, hold the button while pushing the legs back up. Note that if the legs appear stuck in one position, you may need to wiggle them a bit from side to side.
Please refer to the following videos to see a demonstration of leg extension/shortening.
NOT SURE WHICH FIRE MODEL YOU HAVE?
You can find out your exact model under Settings > Device Options > Device Model.
The instructions for whether to extend or shorten your legs are also part of the setup steps presented at the launch of each app.