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Report: Sony employees surprised by Microsoft cloud partnership



  The types of Azure server racks that could soon host Sony content as part of a recent cooperation agreement.
Enlarge / The types of Azure server racks that could soon host Sony content.


Following the surprise announcement last week of a cloud gaming partnership between Microsoft and Sony, Bloomberg conducted some behind-the-scenes analysis using unnamed insider sources to discuss how the deal came about.

Although Sony Bloomberg has confirmed that talks have been taking place between the two console giants since last year, Bloomberg sources said the announcement was still taken by surprise by simple employees of the company. "Managers had to reassure employees and assure them that their plans for the next generation of consoles were not compromised," says Bloomberg, summarizing the company's internal view.

Sony has already transferred the purchase of the streaming gaming provider Gaikai from 201

2 to over 700,000 subscribers for its cloud-based PlayStation Now service launched in 2015. However, Sony's server and network infrastructure has proven to be inadequate to provide the promised "as good as local" experience (but still needs to prove) from key competitors such as Google's recently announced Stadia service. As a result, Sony turned to other companies with a more established cloud infrastructure to expand their streaming gaming presence.

Bloomberg's sources suggest that Sony eventually discussed extending Amazon Web Services' ambitions for cloud games that already provide the PlayStation Network online gaming infrastructure. A person "familiar with the matter" told Bloomberg that the two companies "could not agree on commercial terms". According to a January report from The Information, Amazon plans to launch its own cloud-based gaming service shortly.

Cloud-based gaming seems to have aroused the imagination of investors across the game industry. Sony's share price rose nearly 10 percent on Friday, its biggest gain in a year and a half. However, Bloomberg notes that IHS Markit analysts believe that cloud gaming accounts for only 2% of the game industry revenue by 2023. This is an important reason why this partnership, as surprising as it is, probably does not mean much for the company's immediate future means console warfare.


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