Skip to main content
  1. Home
  2. Gaming
  3. News

Rivals Sony and Microsoft team up for cloud-based gaming solutions

Sony and Microsoft bury the hatchet to beat Google on cloud gaming

By
Xbox PlayStation Microsoft Sony cloud azure game streaming content
Image used with permission by copyright holder

Sony and Microsoft are teaming up on cloud-based gaming and A.I. solutions. This new partnership will see Sony bring its gaming and content streaming to Microsoft’s Azure cloud-computing platform.

Azure is a cloud-computing service that uses Microsoft’s data center and is available in 140 countries in 54 regions worldwide. This joint effort is aimed at developing future cloud solutions to support both companies’ gaming and content-streaming services. What could this mean for gamers? Sony and Microsoft are likely preparing for whatever Google Stadia plans to bring to the table, and aiming to produce results under the PlayStation and Xbox brands that are more robust and capable than current offerings like PlayStation Now.

Recommended Videos

Gamers and tech enthusiasts have been keeping their eyes on the horizon, anticipating the next generation of home gaming consoles and whatever bits of information leak out prior to an official rollout. The big curveball with this wait was the announcement of Google Stadia, ta streaming platform poised to take on Nintendo, Sony, and Microsoft. Stadia aims to allow gamers to access next-gen and current-gen gaming content no matter what type of hardware they have, and to stream high-quality gaming via the internet.

Related

We recently reported that a newly revealed Sony patent seems to be related to a PlayStation-branded competitor to Google Stadia. With this partnership revealed, we’re likely to see even more developments along this line. Does this mean that there will be a single subscription service for both Xbox and PlayStation? Not likely, but not impossible. What’s more likely is that the two will have their own respective services, which will be boosted by collaboration. The two major companies playing nice could even extend into crossplay conversations, but we’ll have to wait and see.

“PlayStation itself came about through the integration of creativity and technology,” Sony CEO Kenichiro Yoshida said in a press release. “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.”

Xbox vs. PlayStation
Image used with permission by copyright holder

Video game streaming of this kind has been attempted in various forms before, but Stadia seems like a plausible attempt at changing the landscape of home console gaming, largely due to Google’s incredible reach and established cloud-computing to power it.

Beyond cloud gaming and content streaming, the partnership also extends to A.I. and semiconductors. Sony will be sharing its cutting-edge image sensors with Microsoft’s Azure A.I. tech and Microsoft, in turn, will be working its advanced A.I. platform and tools into Sony’s consumer products. This is a monumental partnership that should be beneficial to consumers across various entertainment and productivity platforms.

In the wake of this revelation and Sony’s Thursday announcement that it would repurchase up to 4.8% of the total number of stock shares issued — worth approximately $1.82 billion, Sony’s stock skyrocketed 9.89% to levels not seen since December 2018. The buyback period will last from May 17, 2019 to March 31, 2020.

Updated May 17, 2019: Updated to include information about Sony’s stock surge. 

Editors’ Recommendations

Topics
Charles Singletary Jr.
Charles Singletary Jr.
I'm a Birmingham, AL raised author, journalist, and gaming enthusiast currently residing in San Antonio, TX. My work has…
Microsoft gives Activision Blizzard cloud gaming rights to Ubisoft
Microsoft's Xbox Cloud Gaming Service Enters Beta This Week

Microsoft announced its intention to grant Ubisoft, the publisher behind series like Assassin's Creed and Far Cry, the cloud streaming rights for Activision Blizzard titles if Microsoft's acquisition of the Call of Duty publisher goes through.
This deal was made in order to appease the U.K.'s Competition and Markets Authority (CMA). Microsoft has not had an easy time trying to acquire Activision Blizzard as it has run into heavy resistance from regulatory bodies like the U.S. Federal Trade Commission (FTC) and the U.K.'s CMA. The CMA's complaints centered around the potential monopoly Microsoft could have on cloud gaming if the deal were to go through. There was speculation that Microsoft would divest its U.K. cloud gaming efforts to appease the CMA, but it has now presented this new plan that would technically make it give up control of Activision Blizzard game-streaming rights worldwide for the next 15 years.
In a blog post, Microsoft President Brad Smith explainsed that if the Activision Blizzard acquisition happens, Microsoft will give "cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years" in perpetuity following a one-off payment.
Essentially, Ubisoft will be the one deciding which cloud gaming platforms and services to put Activision Blizzard games on, not Microsoft. Smith claims that this means "Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service -- Xbox Cloud Gaming -- or to exclusively control the licensing terms of Activision Blizzard games for rival services," and that Ubisoft will allow them to honor existing agreements with companies like Nvidia. 

Ubisoft has been cloud gaming friendly over the past several years, eagerly putting its games on services like Google Stadia and Amazon Luna. With this deal, Ubisoft says it plans to bring Activision Blizzard games to its Ubisoft+ subscription service. Activision Blizzard CEO Bobby Kotick also commented on the deal, saying that he approves of the deal, but that "nothing substantially changes with the addition of this divestiture" for Activision Blizzard and its investors.
The current deadline for Microsoft's Activision Blizzard acquisition is October 18.

Read more
Why cloud gaming is the linchpin in Microsoft’s troubled Activision Blizzard acqusition
Key art showing multiple devices playing games via the cloud.

The United Kingdom’s Competition and Markets Authority (CMA) delivered a shocker this week when it blocked Microsoft’s acquisition of Activision Blizzard on Wednesday. While a lot of focus on Microsoft’s fight was centered around whether or not the acquisition would give Xbox consoles an unfair advantage over PlayStation consoles, what ultimately decided it was a much smaller market: cloud gaming.
The idea of being able to stream the game you’re playing from the cloud has existed for well over a decade. Cloud gaming’s relevance to the video game industry has only grown over the past several years thanks to both failed and successful efforts from big tech companies like Google, Amazon, and, most importantly, Microsoft. Still, cloud gaming is considered relatively niche, with Activision Blizzard Bobby Kotick calling it "inconsequential" in an interview with Bloomberg and UCL Associate Profession Joost Rietveld saying it’s not a distinct market in a submission to the CMA.
Despite those pleas, the CMA claims that cloud gaming is a “nascent market” and that “already strong incumbent in this market even stronger” in its 418-page report on the matter. Following the CMA’s decision on Wednesday, I spoke to several different analysts to find more clarity about how big Microsoft is in the cloud gaming space and why the CMA should feel compelled to intervene. While experts mostly side with Microsoft over the CMA on this decision, one greater truth emerged from these discussions. Whether one thinks cloud gaming is relevant to this acquisition or not, this emergent style of gaming has reached a point of no return where it'll be instrumental to the video game industry going forward. 
Microsoft, king of cloud gaming
Cloud gaming may sound like a niche within the industry, but that's not entirely accurate. BrandFinance Managing Director Laurence Newell tells Digital Trends that “cloud-based services account for over 70% of Microsoft’s brand value, amounting to a staggering $137.5 billion.” That’s quite an eye-catching number that understandably would raise a regulator's alarm bells. However, Newell admits that gaming only makes up 8.5% of Microsoft’s revenue, and cloud gaming is an even smaller amount of that slice.
Despite its relatively small impact on the wider company, most of the experts I spoke to agreed that Microsoft has emerged as a cloud gaming leader thanks to its compatibility with a large segment of the Xbox Game Pass Ultimate library. Conversely, Activision Blizzard has had almost no cloud gaming presence outside of one Sekiro: Shadows Die Twice port on Google Stadia before that service’s shutdown. If it were to be acquired, it is inevitable that more Activision Blizzard games would likely come to cloud-based gaming services.

Despite the shutdown of Google Stadia and the relatively small brand value received from cloud gaming compared to the rest of the company, the CMA still points out in the press release about its decision that “monthly active users in the U.K. more than tripled from the start of 2021 to the end of 2022. It is forecast to be worth up to 11 billion British pounds globally and 1 billion pounds in the U.K. by 2026.” Associate Professor of Strategy and Entrepreneurship at the UCL School of Management Joost Rietveld, who has also been a consultant for Microsoft during its acquisition process, challenges the notion that cloud gaming as a whole is a single market.
Instead, Rietveld splits it into four categories, placing Xbox Game Pass into a category called “cloud gaming as a feature,” which is when it’s “offered as part of a consumer-facing distribution platform” or “included within a bigger bundle of services provided by the platformer.” Under Rietveld’s view, services like Nvidia GeForce Now, Ubitius, and EE -- all of whom Microsoft has made individual deals to bring Activision Blizzard and Xbox Game Studios titles to -- fall into different categories and thus shouldn’t be considered or directly compared to Xbox Game Pass. No matter how they’re categorized now, the real question mark looming over the technology is its future growth, according to Omdia Senior Principal Games Analyst Steve Bailey.
“Will it remain a niche additional service or become the gaming platform of the future?” Bailey asks in his statement to Digital Trends. “Our projection is that cloud gaming is growing rapidly (revenue should more than double by 2026), but it’s still a long way from taking over the games market, so it remains arguable either way.”
“Arguable” stands out as the keyword to me here. Like any emergent technology, we’re heavily debating the positives and negatives of cloud gaming, specifically through the lens of this acquisition. But what exactly is it that the CMA sees in Microsoft that worries them?
The CMA’s problem with Microsoft
“The CMA’s argument is not that acquiring Activision Blizzard would allow Microsoft to dominate the console market as a whole, where Sony and Nintendo have strong positions relative to Xbox, but only that it would help it to achieve a dominant position in cloud gaming specifically,” Bailey tells Digital Trends. “Microsoft and Activision Blizzard will likely argue that this is disproportionate, given the relatively small scale of the cloud gaming market.”

Read more
Microsoft pledges to bring Xbox PC games to Nvidia GeForce Now
geforce-now-og-no-text-1200x630

Microsoft has announced a 10-year partnership with Nvidia aimed at bringing Xbox PC games to its cloud gaming service competitor Nvidia GeForce Now as part of its ongoing efforts to win over companies skeptical of its potebtial Activision Blizzard acquisition.
This means that players can use Nvidia GeForce Now to play the Steam, Epic Games Store, or Windows versions of titles like Halo Infinite, Redfall, and eventually, Call of Duty through the cloud on GeForce Now. Third-party publishers with games on the Windows Store can also now grant streaming rights to Nvidia. This announcement came during a European Commission hearing where Microsoft tried to convince regulators that its impending acquisition should bne allowed.
Microsoft has been under a lot of regulatory scrutiny even since it announced its intent to acquire Activision Blizzard in January 2022. It's trying to win over industry peers with deals like this one with Nvidia. This week, the Communications Workers of America voiced its approval of the deal, and Microsoft has signed a binding agreement to bring Call of Duty to Nintendo platforms as well. Previously, Nvidia had raised concerns about Microsoft's Activision Blizzard acquisition, but the press release announcing this agreement states that the deal "resolves Nvidia's concerns," and that Nvidia now gives "full support for regulatory approval of the acquisition." 
Regulatory bodies in the U.S., U.K., and Europe are worried that Microsoft acquiring Activision Blizzard will hurt the game industry and sabotage Microsoft's competitors in both console and cloud gaming. Nvidia GeForce Now is seen as one of the biggest competitors to Xbox Game Pass Ultimate's cloud service offerings, which makes it surprising that it reached an agreement with Nvidia. However, this deal also demonstrates how Microsoft is willing to make concessions so that its acquisition of Activision Blizzard is approved.

Read more