TOKYO – Sony and Microsoft, bitter rivals in the video game consensus, will collaborate on demand games to better compete with newcomers like Google, as the industry's foremost battlefield looks like moving to the cloud Nikkei has learned.
Sony CEO and CEO Kenichiro Yoshida has signed a memorandum of understanding with Microsoft CEO Satya Nadella for a strategic commitment. While the details have not yet been hampered, the partnership will concentrate on artificial intelligence and the cloud.
The latter category contains plans for joint development of cloud gaming technology. While this market is expected to grow as an ultra-fast fifth-generation wireless pay-as-you-go, such services require a lot of processing power at the vendor's end to deliver high-quality graphics and minimal delay games. Sony and Microsoft plan to utilize the US data processing hemothy's data center for this purpose.
The two companies, along with Nintendo, dominated the gaming landscape for a long time. But the rise of mobile games has taken competition from other players like China's Tencent Holdings, which publishes the mobile version of the wildly popular PlayerUnknown Battlegrounds.
In addition, they are moving on the lawn which are large companies that already have the powerful server networks needed for efficient streaming as well as massive built-in bases for potential customers. These include Google and the planned platform Stadia Cloud Gaming, as well as Apple, which announced the Apple Arcade subscription service in March.
The emergence of new rivals and technologies led to the Sony-Microsoft team emerging, but it will not end the console wars. The PlayStation and Xbox brands continue to compete.
Outside the gig, the two companies will consider combining Sony image sensors – which control half of the global market – with Microsoft AI technology to develop electronic "eyes" for self-driving vehicles. They will also discuss the fact that Microsoft's Cortana virtual assistant is integrated into TV, speakers and other Sony products.
Binding is an indication of Sony's shift strategy. The Japanese company focuses resources on areas where it can effectively use its strengths, such as gaming and image sensors, and become more open to partnerships in other areas.
Microsoft hopes to use the alliance to strengthen its cloud business and get a coat over Google and Amazon.com.
This is not the first time Sony and Microsoft have worked together. They announced collaborations in home electronics in 1998 and music distribution technology in 1999. This broader connection aims to help both compete more effectively in a rapidly changing environment.