The gaming partnership between Sony and Microsoft didn't just surprise the public: it also surprised the PlayStation team, who had spent years directly competing with Microsoft and its Xbox consoles. The two companies recently announced the new deal that would bring their combined knowledge together to work on technological innovations for their entertainment platforms.
Most importantly, the two will work together with Microsoft Azure, a cloud computing service developed by Microsoft. This partnership will allow Sony to use Azure for its game and content streaming. Although the industry has discussed cloud gaming for years, it has suddenly seen an emergence in interest, particularly after Google announced its gaming platform, Stadia. Stadia will serve as a streaming-only platform, bringing gaming to the masses in a way that was previously not possible. If Stadia proves successful, Microsoft and Sony will need to be able to compete in the game streaming market, which means that a deal between the two could make a lot of sense when looking at the bigger picture.
However, Microsoft and Sony have always been the fiercest of competitors, particularly when it comes to gaming. That's why the industry was surprised when the companies announced their partnership. According to Bloomberg, though, none were more surprised than the PlayStation team. Once PlayStation employees learned of the partnership, Sony had to assure them that it wouldn't affect the development of the PlayStation 5.
Sony has seen some success with cloud gaming. Its PlayStation Now service allows subscribers to play streaming games on their consoles and PCs. That service currently has 700,000 subscribers, but Sony took its connectivity in-house and has suffered complaints since. With both companies focused on improving Azure, both Sony and Microsoft will have more leverage to compete in the cloud-based gaming environment.
Google already has a strong backbone when it comes to servers that can potentially handle cloud gaming. It seems that both Sony and Microsoft feel they need to team up to compete if cloud gaming ever takes off. Even if cloud gaming does become popular, though, hardcore gamers will more than likely still prefer disks and digital downloads with games that reside on their consoles and computers. Even Google may not have the kind of connectivity it needs to make Stadia a fully-realized system, but if it does get to that point, Sony and Microsoft are ready.