Sony and Microsoft team up: Is this the dawn of the PlaystationBox X 360?


By Neil Merrett

News that the world’s two largest players in the videogame market are setting aside their differences to collaborate on AI and Cloud-based development services is the sign of one sure thing, at least according to gaming, tech and businesses journals. Streaming will be inevitable….

It started this week as a lot of potentially big things do these days, with a press release full of grand, but vague sounding declarations.

Gaming giants Sony and Microsoft were set to team up, or were rather set to “explore a strategic partnership.”

According to the release, the two companies have entered into a memorandum of understanding to share expertise around using cloud-based solutions for gaming and AI solutions.

This focus will be be powered through Microsoft’s Azure Cloud service and its datacentres and will potentially underpin future Sony and services, as well as third party games.

A joint statement read, “Sony and Microsoft will also explore collaboration in the areas of semiconductors and AI. For semiconductors, this includes potential joint development of new intelligent image sensor solutions. By integrating Sony’s cutting-edge image sensors with Microsoft’s Azure AI technology in a hybrid manner across cloud and edge, as well as solutions that leverage Sony’s semiconductors and Microsoft cloud technology, the companies aim to provide enhanced capabilities for enterprise customers.”

Azure itself is a major competitor to the age’s tech giants such as Google, but what really does this all mean for the types of games you may be playing over the next decade?

The Nintendo ‘Play Station’

Amidst the upcoming entry of Google and other web giants into gaming, traditional games companies will likely have to adapt or die to the upcoming technological changes. The two biggest rivals in modern gaming announcing a partnership may be a start, but we have been here before.

Nintendo and Sega have both famously failed in the past to shift their thinking and work alongside an interloper to change their business models, ultimately to some significant loss of their respective market shares. That interloper in the 1990’s was Sony and we know how that panned out….

Still what did the wider world make of this possible partnering between Sony and Microsoft, and might this lead the way to a PlaystationBox 360 someday?

The Financial Times saw the announcement of these two bitter rivals joining forces, at least from a development perspective, as an example of their concerns about the challenge they expect to face from Google, Amazon and Apple.

Leo Lewis and Tim Bradshaw described the alliance as a tentative arrangement that creates a single unified platform to develop games on and ensure a decisive creative edge against a group of powerful companies looking to secure market leading content for their upcoming gaming services.

The two FT journalists wrote, “Analysts said that the announcement, though still vague on terms and bound only by a memorandum of understanding, was an unmistakable symbol of how seriously existing console players take the prospect of fundamental disruption from outside.”

The announcement in March of Google’s Stadia streaming service, which would see the company’s data centres being used to host high-end games on any phone, tablet or computer device with the Google Chrome browser, was seen as a warning shot at the very notion of expensive console hardware.

stadia presentation

Google unveiled Stadia In March with the aim of a launch for later this year

Apple soon followed by announcing its arcade service, where it is investing hundreds of millions of dollars to create exclusive titles that can be played via a subscription service on its devices.

“Both services are slated to launch by the end of this year, with speculation growing that Amazon may join the fray with its own games platform,” the FT journalists noted.

“While Sony’s latest generation of PlayStations has sold 92m units, and Microsoft’s Xbox is estimated to have sold about 40m, analysts have said that both companies’ positions may be under longer-term threat from the advent of game streaming and the entry to the market of huge, deep-pocketed competitors.”

Validation of streaming

Tech publication Venturebeat saw the announcement as validation of the idea that Google’s subscription-based Stadia streaming service was the future of high-end gaming, if not in 2019, then in some not too distant time.

Emil Protalinski said in the publication that the timing of Sony and Microsoft’s announcement is striking.

In particular, despite Sony launching its own subscription service for gamers in 2014, the company’s model was still very much hardware driven.

Mr Protalinski said that in terms of major cloud platforms that can provide a range of services and even software to homes and offices that are powered through datacentres, there are three dominant names for consumers – Amazon Web Services, Mcrisoft Azure and Google Cloud.

He said, “Of the three options, Sony chose its direct competitor in gaming. The company apparently values direct rival Microsoft’s experience in gaming (and cloud gaming) more than a neutral party like Amazon (again, the cloud market leader) or the newest gaming challenger, Google.”

Protalinski said that from the traditional standpoint of gaming giants manufacturing their own consoles and publishing a range of first and third-party games, there seemed little sense in two gaming giants that are the only direct competitors in the current market working together.

He added, “The maker of Xbox is going to power PlayStation? That’s crazy!”
“But when you consider the cloud and AI, it all makes sense. As I’ve argued before, Google Stadia is all about the cloud and AI. This is so clearly a direct response. Now we wait for Amazon to show up to the party.”

The way of the Dinosaur

Dave Lee, North American technology correspondent for the BBC, said that the announcement showed how Sony’s lack of expertise and cloud-infrastructure had left it exposed to a changing market, despite over a twenty year dominance in the market for console hardware.

He cited tech analysts who viewed Microsoft as the best option therefore for supporting the future of Sony’s gaming offerings, even with their competitive dynamic.

However, Mr Lee said that the partnership was potentially more mutually beneficial for the two companies than it may at first seem.

He said, “While precise details of the partnership are still vague, the companies also said they would be working together on new semiconductors, image sensors and artificial intelligence.”

“For Microsoft, that opens the door to getting its cloud technology integrated into more consumer products, such as cameras and televisions, rather than working mostly on business applications as it does today.”

No news yet though on whether we might ever get a single shared piece of hardware between these two fierce rivals.

But perhaps that is the point, perhaps both companies see a day when expensive gaming hardware goes the way of the dinosaur, or worse…. the Atari.

2 responses to “Sony and Microsoft team up: Is this the dawn of the PlaystationBox X 360?

  1. Great article Neil. I feel like this topic hasn’t got much time in the spotlight for how big of an announcement it is. These two gaming giants teaming up together surely means times are changing. I ponder if Microsoft is looking for a way out of the console industry. They own the PC platform when it comes to gaming OS and seem to be looking for new and easier ways to bring in a constant stream of revenue. We have also seen that they are willing to work with Nintendo and bring their first party games to other platforms. This makes me wonder if within the Switches lifespan we may see the Xbox Gaming Pass on the Portable console. Only time will tell.

    Liked by 1 person

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