Microsoft and Sony to collaborate on game-streaming technology together

Kenichiro Yoshida, President and CEO, Sony Corporation (left), and Satya Nadella, CEO, Microsoft (Image credit: Microsoft)

Microsoft is helping Sony on its next game console - or at least the game-streaming service that will be running on it: Microsoft CEO Satya Nadella and Sony CEO Kenichiro Yoshida today announced their partnership and the pair’s plans to work together on game-streaming and artificial intelligence.

The cornerstone of the partnership is Microsoft’s Azure cloud technology that currently powers a huge number of web applications and streaming services - which both Sony and Microsoft will continue to explore in the future.

“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,” Microsoft said in a blog post today. 

“In addition, the two companies will explore the use of current Microsoft Azure datacenter-based solutions for Sony’s game and content-streaming services.” 

The enemy of my enemy is my friend

Why is this happening?  The short answer is that Sony is looking for help developing new technology for its cloud gaming service PlayStation Now and Microsoft knows a thing or two about cloud data centers.

Moreover, although Sony and Microsoft have always been at ends when it comes to gaming hardware, the two now face a larger foe in the game-streaming arena: Google Stadia. The worry is that, when it arrives, Stadia could usurp Sony’s throne and smother Microsoft’s Project X Cloud service before it gets off the ground. 

That’s what this partnership is trying to prevent.

"For Sony to scale its offering in a similar way promised by Microsoft with Project X Cloud and Google with Stadia, it needs to partner to compete."

Piers Harding-Rolls

According to the Director of Games Research & Lead AR/VR Analyst at IHS Markit, Piers Harding-Rolls, the partnership is about putting differences aside to create a more competitive product.

“While Sony with its PS Now service is the biggest cloud gaming operator globally with 36% share of the $387 million world cloud gaming market in 2018, it is exposed in terms of cloud infrastructure and service delivery,” Harding-Rolls said in an email to TechRadar. “For Sony to scale its offering in a similar way promised by Microsoft with Project X Cloud and Google with Stadia, it needs to partner to compete.”

Faster services, better hardware

That said, while the cornerstone of the partnership clearly seems to be Microsoft’s Azure platform, the two companies will also be working together on AI developments and new semiconductors to be used in enterprise business solutions. 

I hope that in the areas of semiconductors and AI, leveraging each company’s cutting-edge technology in a mutually complementary way will lead to the creation of new value for society.

Kenichiro Yoshida

In an example listed in Microsoft’s blog post, pairing Sony’s semiconductors with Microsoft’s AI tech could “provide highly intuitive and user-friendly AI experiences” in new devices. Though it’s unclear what kind of devices those would be, and which company gets to release them. 

"We collaborate closely with a multitude of content creators that capture the imagination of people around the world, and through our cutting-edge technology, we provide the tools to bring their dreams and vision to reality,” said Kenichiro Yoshida, president and CEO of Sony. "Additionally, I hope that in the areas of semiconductors and AI, leveraging each company’s cutting-edge technology in a mutually complementary way will lead to the creation of new value for society.” 

...just don't expect a Microsoft PS5 out of this

What Microsoft and Sony are making clear here is that - even though they'll pool resources for cloud gaming infrastructure research - the pair will continue to work separately on their own gaming hardware. 

What that means is that the PS5 will still be developed and produced entirely by Sony and the next Xbox will be made entirely by Microsoft but both could be using the same server infrastructure for their respective game-streaming services.

And, considering what Google has planned with Stadia, Sony and Microsoft are going to need all the help they can get. 

TOPICS
Nick Pino

Nick Pino is Managing Editor, TV and AV for TechRadar's sister site, Tom's Guide. Previously, he was the Senior Editor of Home Entertainment at TechRadar, covering TVs, headphones, speakers, video games, VR and streaming devices. He's also written for GamesRadar+, Official Xbox Magazine, PC Gamer and other outlets over the last decade, and he has a degree in computer science he's not using if anyone wants it.

Latest in Gaming
Warhammer 40,000: Space Marine 2
With discounts of up to 95%, these are the biggest deals I've managed to find in the Steam Spring Sale
WWE 2K25
I've spent days in the ring with WWE 2K25, and it's like a five-star match ruined by the Million Dollar Man
Asus ROG Ally using Steam
I think Asus could be the perfect partner for an Xbox handheld – but I have questions
NYT Connections homescreen on a phone, on a purple background
NYT Connections hints and answers for Saturday, March 15 (game #643)
Rainbow Six Siege X promotional art.
The Tom Clancy's Rainbow Six Siege X 6v6 mode might finally pull me away from Black Ops 6
Atelier Yumia
I was already sold on Atelier Yumia as an RPG, but I wasn’t expecting it to have my favorite crafting system in all of gaming
Latest in News
Super Mario Odyssey
ChatGPT is the ultimate gaming tool - here's 4 ways you can use AI to help with your next playthrough
Brad Pitt looks over his right shoulder with 'F1' written behind him
Apple Original Films will take you behind-the-scenes of a racing cockpit in this new thrilling F1 movie trailer
AI writer
Coding AI tells developer to write it himself
Reacher looking down at another character from the Prime Video TV series Reacher
Reacher season 3 becomes Prime Video’s biggest returning show thanks to Hollywood’s biggest heavyweight
Finger Presses Orange Button Domain Name Registration on Black Keyboard Background. Closeup View
I visited the world’s first registered .com domain – and you won’t believe what it’s offering today
Image showing detail of the Leica D-Lux 8
Still can't get a Fujifilm X100VI? This premium Leica compact costs less, and it's in stock