Were you unable to attend Transform 2022? Check out all of the summit sessions in our on-demand library now! Watch here.

News broke yesterday that Sony and Microsoft are kissing in a tree, working on AI and cloud technology. The new Microsoft and Sony partnership has the two companies working on cloud-based gaming services together. In other words, the duo has given Google’s Stadia its first validation.

I don’t mean this simply because Stadia is a cloud gaming platform. Google didn’t get there first (Stadia hasn’t even launched). Sony and Microsoft have their own cloud gaming platforms, namely PlayStation Now and Project xCloud. But the timing here is striking.

Cloud and AI, again

Sony launched PlayStation Now, its cloud gaming subscription service, in January 2014. Google unveiled Stadia in March 2019, and less than two months later, all of a sudden, Sony is tapping Microsoft to power its existing game and content-streaming services?

There are three big cloud platforms. In order of market share, they are: Amazon Web Services, Microsoft Azure, and Google Cloud. The partnership is a big business win for Azure, as the press release states:


MetaBeat 2022

MetaBeat will bring together thought leaders to give guidance on how metaverse technology will transform the way all industries communicate and do business on October 4 in San Francisco, CA.

Register Here

Under the memorandum of understanding signed by the parties, the two companies will explore joint development of future cloud solutions in Microsoft Azure to support their respective game and content-streaming services. In addition, the two companies will explore the use of current Microsoft Azure datacenter-based solutions for Sony’s game and content-streaming services.

Of the three options, Sony chose its direct competitor in gaming. The company apparently values direct rival Microsoft’s experience in gaming (and cloud gaming) more than a neutral party like Amazon (again, the cloud market leader) or the newest gaming challenger, Google.

In addition to the cloud powering gaming and content streaming, Microsoft and Sony have also agreed to work together on AI. From the press release:

As part of the memorandum of understanding, Sony and Microsoft will also explore collaboration in the areas of semiconductors and AI. For semiconductors, this includes potential joint development of new intelligent image sensor solutions. By integrating Sony’s cutting-edge image sensors with Microsoft’s Azure AI technology in a hybrid manner across cloud and edge, as well as solutions that leverage Sony’s semiconductors and Microsoft cloud technology, the companies aim to provide enhanced capabilities for enterprise customers. In terms of AI, the parties will explore incorporation of Microsoft’s advanced AI platform and tools in Sony consumer products, to provide highly intuitive and user-friendly AI experiences.

Microsoft and Sony’s partnership makes no sense from a gaming lens. They’re direct competitors and have been for years. The maker of Xbox is going to power PlayStation? That’s crazy!

But when you consider the cloud and AI, it all makes sense. As I’ve argued before, Google Stadia is all about the cloud and AI. This is so clearly a direct response.

Now we wait for Amazon to show up to the party.

ProBeat is a column in which Emil rants about whatever crosses him that week.

GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Discover our Briefings.