This could mean two things: First, removing players from consoles makes them almost streaming boxes. Add to that a joint venture for more cloud gaming solutions for businesses and console games that could completely follow the path of the gaming cloud, as they do with PC gaming. Secondly, if all PC and console games are stored/accessed via the cloud, it means that the exclusivity of the platform loses almost all its meaning, especially in the context of this type of partnership. Microsoft and Sony announced yesterday their intention to jointly develop a “strategic partnership” in which new cloud and AI technologies, as well as corresponding game and content streaming services, will be exchanged and collaborated. That`s a lot of vague business language, but both companies provide just enough information that we can wildly speculate on what such a partnership means for the future of PC gaming and gaming in general, if it means anything so soon. In a conference call on Tuesday (transcribed by VGC), Sony executive vice president Toru Katsumoto said he expected Sony to develop “a very strong partnership” with Microsoft “in the medium and long term.” This seems like a slow setup to share technologies and resources to shape the future of cloud-only console gaming. Of course, digital purchases and downloads have been the norm for five years, but all of our games are still downloaded directly to our PCs and consoles. The cloud, on the other hand, stores all these games on a remote server that we access from our PCs and now possibly from our consoles. It`s clear that Sony and Microsoft will try to align the hardware that powers each company`s cloud game streaming services on a common platform. We`ve already started seeing this in the console space with the Xbox One and PlayStation 4, and the next-gen consoles slated for 2020 should be very similar from a hardware standpoint.
Aligning this hardware will make it much easier for game developers to target a common cloud platform and test game performance. Microsoft and Sony last week unveiled a surprising partnership in which the companies will work together to develop future cloud solutions for game and content streaming services. While the two companies have spent more than 15 years battling for PlayStation and Xbox sales, Sony is now looking at Microsoft`s vast cloud experience to support its existing and future streaming services, and Microsoft is working with a rival to fend off much bigger gaming threats. “Basically and fundamentally, the fact that we have a business model in the areas where they work with us, where we depend on their success. So we`re going to do the best job for them, whether it`s in the cloud, AI or whatever, to make sure Sony can succeed with its own intellectual property creation. Note to editors: For more information, news, and insights from Microsoft, see news.microsoft.com in the Microsoft News Center. Web links, phone numbers, and titles were correct at the time of publication, but may have changed. For additional assistance, journalists and analysts can contact Microsoft`s Rapid Response Team or other appropriate contacts listed under news.microsoft.com/microsoft-public-relations-contacts. Although Sony has been offering its own PlayStation Now streaming service for years, it hasn`t changed dramatically since its launch. Sony still derives most of its PlayStation revenue from game sales to console owners, and this business seems to be increasingly under threat. If the future of gaming is cloud-based, then infrastructure and content will be critical. One of the reasons for the surprise is that Sony`s PlayStation consoles and Microsoft`s Xbox are in direct competition with each other, so a partnership of any kind might seem like a rather questionable strategy.
The most direct reading of today`s announcement could only be a recognition of the respective strengths of Sony and Microsoft. Sony has a head start in streaming content through its PlayStation Now and PlayStation Vue brands. Microsoft, on the other hand, has a wider geographic distribution of Azure data centers than its competitors Amazon and Google. Therefore, given the sensitivity of game streaming services to latency issues, Azure is a great platform for Sony to stream its PlayStation content to users. The cloud Ryan is referring to is Microsoft`s Azure cloud technology, which currently supports a large number of web applications and streaming services. In 2019, Sony and Microsoft announced a partnership in which the two companies would collaborate on game streaming technology. There is a twisted logic to this idea. Google`s announcement of the Stadia service in March and reports that Amazon is planning a similar game have convinced a large segment of the industry that remote streaming is the inevitable future of gaming. The prospect of imminent competition from these internet giants could be enough to get former rivals to work together to maintain a common position in the market. And given the architectural similarity of current Xbox and PlayStation consoles, it might make sense to team up for a single “dual console” streaming standard.
Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation in the era of an intelligent cloud and intelligent edge. Its mission is to empower every person and organization on the planet to do more. While Sony has experience with its own content streaming services in the past, it makes sense for them to work with a third-party provider that will have more robust technologies in the future, especially with a greater focus on streaming content through local consumption. Watching two fierce console competitors announce a gaming partnership makes it easy to jump to conclusions about what the future of the gaming market might look like. We`re sure there will be countless speculative articles and YouTube videos talking about how this partnership heralds the “end of the console war” for these two companies. We can practically hear the keyboards entering the supposed details of an imaginary shared streaming service from Microsoft and Sony that allows owners of PlayStation or Xbox hardware (and possibly other devices) to play games streamed through a single server platform under a single Netflix-style subscription. The initial announcement gave the impression that this partnership had been negotiated with equal interest by both parties, but in a recent Fortune interview with Satya Nadella, Microsoft`s CEO revealed that it was Sony that initially approached Microsoft about the collaboration. Microsoft and Sony`s cloud partnership also raises questions about other game streaming competitors. EA employs 1,000 people on Project Atlas, a cloud-based game development platform.
Like Google Stadia, EA`s project is cloud-native and equally ambitious in its attempts to redefine the future of gaming. Nvidia also has its own GeForce Now streaming service, and Valve turns Steam Link into a personal cloud service that streams games anywhere. Wondering what`s the news about Sony`s cloud strategy in development? Well, keep waiting, because although the company has already entered into a strategic partnership with Microsoft in 2019 to improve its cloud capabilities and use Azure, the news about the fruits of the work of this partnership is still quite vague. The big thing we know now is that everything Sony creates for its cloud gaming ambitions will be playstationxclusive. 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 it will require servers close to players in several cities around the world. This is a significant investment that these three companies have already made, but that Sony clearly does not want or cannot make. Perhaps in the future, Microsoft and Sony will create their own VR theme park, powered by small form factor PCs that tie guests together like backpacks to move around the play area easily. Wait, Oculus recently got a PC without a PC with its Quest VR headset.
Maybe Microsoft and Sony want to try VR/AR cloud gaming? It`s a great theory, yes, but hey, growing up or going home? Another piece of the cloud game puzzle is Nintendo. Rumors suggest that Microsoft and Nintendo have entered into a closer relationship in recent months. .