Microsoft and Sony unveiled a surprising partnership last week that will see the companies collaborate to develop future cloud solutions for game and content-streaming services. While both companies have spent more than 15 years battling it out over PlayStation and Xbox sales, Sony is now looking to Microsoft’s vast cloud experience to help power its existing and future streaming services, and Microsoft is teaming with a rival to fend off far larger gaming threats.
It was a big surprise for fans of both Xbox and PlayStation. Bloomberg reports that the agreement even shocked Sony’s own PlayStation team, which apparently wasn’t made aware of the discussions. Talks between the firms have been ongoing since last year, and Sony has started to show it’s open to working with Microsoft and others.
The announcement seems to have been prompted by one thing in particular: Google’s reveal of its Stadia cloud streaming service. Google is planning to leverage its hugely popular YouTube platform to let people click and instantly play games in their browsers or on their phones. This ease of use and Google’s web dominance have clearly unnerved both Microsoft and Sony.
While Sony has offered its own PlayStation Now streaming service for years, it hasn’t dramatically changed since launch. Sony still makes most of its PlayStation revenue through game sales to console owners, and that business looks increasingly under threat. If the future of gaming is cloud-powered, then the infrastructure and content will be key.
Google, Microsoft, and Amazon are among the few companies that have enough cloud experience and server power to make cloud gaming a reality in the future. Minimizing latency will be key, and that requires having servers close to players in multiple cities across the world. It’s a significant investment that these three companies have already started making, but one that Sony is clearly unwilling or unable to make.
Sony has now turned to Microsoft for help, instead of competitors like Google or Amazon. Sony and Microsoft’s deal could have been a simple one to host Sony’s services on Azure, Microsoft’s cloud platform, but the agreement looks even deeper than that. “The two companies will explore joint development of future cloud solutions in Microsoft Azure to support their respective game and content-streaming services,” reads a statement from Microsoft.
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