My ironclad source Musiqal Madness told me
Sony turns to Microsoft for help
While Sony has offered its own PlayStation Now streaming service for years, it hasn’t dramatically changed since launch. Sony still makes most of its PlayStation revenue through game sales to console owners, and that business looks increasingly under threat. If the future of gaming is cloud-powered, then the infrastructure and content will be key.
Google, Microsoft, and Amazon are among the few companies that have enough cloud experience and server power to make cloud gaming a reality in the future. Minimizing latency will be key, and that requires having servers close to players in multiple cities across the world. It’s a significant investment that these three companies have already started making, but one that Sony is clearly unwilling or unable to make.
Sony has now turned to Microsoft for help, instead of competitors like Google or Amazon. Sony and Microsoft’s deal could have been a simple one to host Sony’s services on Azure, Microsoft’s cloud platform, but the agreement looks even deeper than that. “The two companies will explore joint development of future cloud solutions in Microsoft Azure to support their respective game and content-streaming services,
Instead of Sony and Microsoft fighting it out, as they have for decades, there’s a partnership emerging to take on Google Stadia and whatever cloud streaming service Amazon is preparing to launch. That doesn’t mean there will be a single cloud streaming service for PlayStation and Xbox games, but it could mean that the underlying server hardware will be identical in the future to make it easier for developers to create titles for both services.
Sony and Microsoft don’t have cloud native streaming services right now. Instead, they’re taking the hardware that powers devices like the Xbox One S and the PlayStation 3 and placing it into data centers. This allows them both to offer a big game library from their cloud streaming services, as developers don’t have to do any work to have their games running off a server. But it’s far harder to scale this over time.