Last week many industry observers were surprised when Sony and Microsoft announced a deal to work together on cloud games\/AI and other technology.\u00a0 This deal was done at the highest level of both companies.\u00a0 The big question of many observers is whether Sony and Microsoft are teaming up to fight a perceived challenge from newcomers like Google and Amazon?<\/p>\n
The deal basically has Sony using some of Microsoft\u2019s Azure cloud platform technology to develop game and content streaming services.\u00a0\u00a0 They are also exploring working together in semiconductors and artificial intelligence.<\/p>\n
As usual, it is always good to read the actual press release<\/a> before relying on the wide range of opinions (including the analysis of DFC Intelligence).\u00a0 The actual announcement is vague.\u00a0 The reality is this announcement is probably more symbolic than practical in terms of its impact on the near term for the game industry.<\/p>\n The biggest surprise was that this announcement was made very public between Kenichiro Yoshida, Sony\u2019s CEO and Satya Nadella, Microsoft\u2019s CEO.\u00a0 Overall this is a big win for Microsoft, but it also shows Sony is getting back some of its strategic focus that was so strong back in the 1990s.<\/p>\n When it comes to cloud services, Google, Amazon, and Microsoft are the biggest players.\u00a0 Now, all three are competing in games.\u00a0 However, Sony, like the other players, is about much more than just games.\u00a0 The official announcement mentioned games AND content streaming services.\u00a0 It clearly was not a reaction to Google’s underwhelming announcement of the Stadia game service<\/a>.<\/p>\n Sony has a great deal of content beyond games.\u00a0 This includes its PlayStation Vue streaming service.\u00a0 Despite, the name, Vue has little to do with games but is designed as a full replacement for cable television service.\u00a0 It competes with services from Google and Amazon.<\/p>\n When you look at from a broad perspective, games are only one part of content streaming.\u00a0 Large companies work together all the time on services that seem to compete with their own divisions.\u00a0 In particular, Microsoft specializes in providing software and services to companies that have the potential to compete with other Microsoft divisions.<\/p>\n Sony is a hardware company that has added software and services over the years.\u00a0 In many cases, the company has tried to build its own solutions.\u00a0 On the other end, Microsoft is a software and services company that has specialized in cloud computing services.\u00a0 Of course, Microsoft will most likely primarily use its own services for its game division, but they also provide those services for third parties.<\/p>\n