Sony Microsoft Partnership Took PlayStation by Surprise

Alfred Osborne
May 21, 2019

A Sony spokesman confirmed that negotiations began previous year and were reportedly handled by Sony's senior management in Tokyo with no involvement of the PlayStation team. Both the companies are teaming up to work on cloud products for their respective game and content-streaming services.

Remote Play: Turns PlayStation®4 (PS4™), which is expected to reach 100 million units in cumulative sales this calendar year, into a streaming game server, providing streaming content at the closest point to users. Of course, the current plans for the next-gen console are still the same.

In case you missed the announcement last week, Sony and Microsoft have entered into a vague partnership on "direct-to-consumer entertainment platforms and AI solutions", one that is centered around the latter's Azure datacenter solution.

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Gaming is the next big growth segment for technology companies and with a new partnership, Sony and Microsoft have officially acknowledged it. That led Sony to reach out to other companies with more established cloud infrastructure to expand its streaming gaming footprint.

If streaming takes off in the gaming space - as many have predicted - it would mean that it will have to compete against Microsoft's Xbox while also paying for cloud access. Asymmetric Advisors strategist Amir Anvarzadeh said, "Sony feels threatened by this trend and the mighty Google, and has made a decision to leave its network infrastructure build-up to Microsoft". For the record, Sony's gaming division is also responsible for bringing in more than a third of the brand's total income, which is why many feel that they should've been consulted first. As for the AI part of the deal, Sony would contribute its image sensors to further improve Microsoft's Azure AI tech.

Sony CEO and President Kenichiro Yoshida's statement following the announcement of the collaboration certainly indicates that the adjust to change is indeed underway. One person "familiar with the matter" told Bloomberg the two companies "couldn't agree on commercial terms" for the deal.

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