Sony and Microsoft will partner on cloud, AI, and semiconductors

In a contender for the decade’s most surprising partnership, Sony and Microsoft have agreed to work together on cloud and AI technologies.

AI and cloud are increasingly vital technologies, and Sony isn’t exactly considered a leader in either. It’s easy to see what Sony is getting out of the partnership, but less so what Microsoft sees in the collaboration.

Microsoft and Sony are each other’s biggest competitor in the gaming space. Gaming is shifting towards cloud streaming, as shown by Google Stadia and Microsoft’s own xCloud, and Sony was expected to struggle in this area.

Sony was among the first to launch a game streaming platform with PlayStation Now, but it suffered from poor quality and high latency. Unlike Microsoft and Google, major cloud players, the company doesn’t have such a large global infrastructure to rely on.

“The two companies will explore joint development of future cloud solutions in Microsoft Azure to support their respective game and content-streaming services,” Microsoft said in a statement.

As part of the agreement, Sony will use Microsoft’s cloud solution Azure. PlayStation’s existing game and content-streaming services will use Azure in the future.

Microsoft will gain some profit from this, but if the company wanted to be ruthless, it probably could have shut Sony out of the market and contended with Google’s emergence. Microsoft has established franchises, studios, and partners in the gaming market. Google is yet to prove itself, which could have put Xbox in a substantial lead.

Sony arguably has the strongest, most recognisable franchises in the gaming industry. There’s a possibility this partnership is to combine those franchises, with Microsoft’s technology, in a bid to fend off competition from Google and Amazon.

Kenichiro Yoshida, President and CEO of Sony, said:

“PlayStation itself came about through the integration of creativity and technology. Our mission is to seamlessly evolve this platform as one that continues to deliver the best and most immersive entertainment experiences, together with a cloud environment that ensures the best possible experience, anytime, anywhere.

For many years, Microsoft has been a key business partner for us, though of course the two companies have also been competing in some areas. I believe that our joint development of future cloud solutions will contribute greatly to the advancement of interactive content.”

Earlier this year, Microsoft’s gaming boss Phil Spencer promised Xbox will ‘go big’ at this year’s E3 conference which Sony will be absent from. A lot more will be revealed about the company’s gaming strategy then, so we’ll keep you posted with any updates.

Elsewhere, Sony and Microsoft will also be partnering on AI and semiconductors. This will include the potential joint development of new intelligent image sensor solutions.

The companies aim to provide enhanced capabilities for enterprise customers through integrating Sony’s image sensors with Microsoft’s Azure AI technology in a hybrid manner across cloud and edge.

Both parties also plan to incorporate Microsoft’s advanced AI platform and tools in Sony consumer products, to ‘provide highly intuitive and user-friendly AI experiences.’

“Sony has always been a leader in both entertainment and technology, and the collaboration we announced today builds on this history of innovation,” comments Microsoft CEO Satya Nadella. “Our partnership brings the power of Azure and Azure AI to Sony to deliver new gaming and entertainment experiences for customers.”

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