Thanks to a press release, we have learned that Sony and Microsoft have announced a Cloud partnership. This partnership will see Sony using Microsoft’s Azure servers to run their gaming cloud and content streaming. The two companies will also be collaborating on semiconductors and AI.

From the press release:

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

This partnership is twofold: Sony will benefit from Microsoft’s Azure servers and the improvements this can bring to their gaming services like PS NOW. For Microsoft, this opens up a new area for additional revenue as they rent the servers to Sony.

As part of the memorandum of understanding, Sony and Microsoft will also explore collaboration in the areas of semiconductors and AI. For semiconductors, this includes potential joint development of new intelligent image sensor solutions. By integrating Sony’s cutting-edge image sensors with Microsoft’s Azure AI technology in a hybrid manner across cloud and edge, as well as solutions that leverage Sony’s semiconductors and Microsoft cloud technology, the companies aim to provide enhanced capabilities for enterprise customers. In terms of AI, the parties will explore incorporation of Microsoft’s advanced AI platform and tools in Sony consumer products, to provide highly intuitive and user-friendly AI experiences.

Kenichiro Yoshida, President and CEO of Sony, noted that “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.”

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

It’s possible that this partnership has been brought about as a result of Google and their Stadia streaming plans. With Google Stadia launching in 2019 and Google building at least one first-party studio, Sony and Microsoft are taking the threat of another competitor quite seriously.