General Sony States Relationship with Microsoft is "Deepening"

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Sony stated that its relationship with Microsoft is “deepening” with multiple discussions around licensing the Xbox parent’s cloud server technology. Microsoft and Sony announced a “strategic partnership” in May 2019, which would result in the PlayStation maker using Microsoft Azure data centers for cloud gaming and content streaming services.

Sony and Microsoft, as part of the agreement, will also explore collaboration in the areas of semiconductors and AI. During an earnings call on Tuesday (transcribed by VGC), Sony’s executive vice president Toru Katsumoto said he anticipates Sony will develop “a very strong partnership” with Microsoft in the “mid to long-term”.

“Since last year we have been discussing this collaboration with Microsoft. In addition to cloud streaming games [there are] semiconductors, consumer electronics and remote solutions… in these areas we are proceeding with our discussions,” he said.

“Microsoft Azure has splendid cloud technologies and they have given us [clear] explanations so far. Each side has its merits and it seems that our mutual understanding is deepening after discussions.”
The biggest issue Sony has and would like to work with Microsoft on is "congested" server use during night time hours, Katsumoto said. “Gamers usually play games during night and there will be congestion of the servers [during this time], but in the day time not so much,” he explained. “How can we utilise the servers more efficiently and effectively? That’s a technical point and we are discussing [this] with Microsoft.

“In a mid to long-term basis, it is going to be a very strong partnership.”
Both Microsoft and Sony will explore their joint development of future cloud solutions in Azure to enhance their respective gaming and content streaming services. The pair said that working together would allow the companies to deliver better experiences for both customers and creators. In a follow-up interview, Microsoft CEO Satya Nadella claimed the cloud gaming deal was “all driven” by Sony.

First of all, it’s all driven by Sony,” he told Fortune. “They looked at who are all their partners that they can trust. In fact, it turns out, even though we’ve competed, we’ve also partnered.
Microsoft’s new game streaming platform, Project xCloud, is continuing to grow since its preview program last year. The platform allows users to play console games from the cloud on an Android phone or tablet. Nadella said in April that xCloud “now has hundreds of thousands of users in preview across seven countries, with eight more launching in the coming weeks”.

Lead PlayStation 5 architect Mark Cerny has called Sony cloud-gaming “pioneers”, adding that its vision in this area “should become clear” as the company heads toward the next-gen console’s release during the 2020 holiday season. Sony also plans on revealing new titles and has just reached 2.2 million
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