The partnership may sound awkward, however, since Sony has its game-on-demand services likes of PlayStation Now, but this platform needs expansion to accommodate the coming wave of content-streaming services.
Microsoft and Sony have formed a partnership on video games streaming, despite being fierce competitors.
"The company is now able to both invest in growth and provide shareholder returns as the level of free cash flow created from businesses increases, and this gives a favorable impression", Yu Okazaki, Nomura analyst notes.
Cloud gaming is possibly the next big thing seeing the flocking of movie platforms like Netflix and other streaming services gaining big numbers each day. The pair will work on user-friendly AI experiences too, utilising Microsoft's AI platform with Sony's consumer products.
It could also mean that Sony will be using Microsoft's Project xCloud technology for its PlayStation Now service. "I feel our combined development of future cloud options may contribute substantially to the progress of interactive content". That could play into a split hardware plan that Microsoft alluded to at last year's E3, with a high-end console for top-of-the-line local gaming and streaming gaming content that can also run on all sorts of other devices.
As we have reported, Microsoft and Sony have joined forces to improve game streaming and the use of AI.
The announcement also said that the two companies would also "explore collaboration in the areas of semiconductors and AI (artificial intelligence)". Presumably this will allow Sony to expand on its existing streaming service, PlayStation Now, into something comparable to the likes of Google Stadia. The statement brings up potential joint development of new intelligent image sensor technology.
The backbone of this partnership seems to be Microsoft's Azure cloud computing service. When Google begins its Stadia charm offensive, it's most likely going to point to the likes of the PS4 and Xbox One and their boxy bulk as being an unnecessary weight worth jettisoning. The two companies say that they might integrate Sony's sensor technology with Microsoft's Azure AI research "to provide enhanced capabilities for enterprise customers".
"Sony has Always been a pioneer in technology and entertainment, and also the Cooperation we announced today builds on this history of invention", Microsoft Chief Executive Satya Nadella said in a statement.