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Microsoft CEO Satya Nadella: Cloud partnership is 'driven by Sony'

Sarah LeBoeuf

Microsoft CEO Satya Nadella: Cloud partnership is 'driven by Sony'

Nadella, a vocal advocate for Microsoft Azure, told Fortune that a growing number of companies are using the platform for cloud gaming services, including direct rival Sony. The Microsoft CEO said that this unlikely partnership is built on trust.

Sarah LeBoeuf,Mon, 29 Jul 2019 18:55:00

If there’s one buzzword that keeps being tossed around when referring to the future of video games, it’s “cloud.” Discussion about cloud gaming has been everywhere this year, starting with Google unveiling its Stadia gaming platform in March. IHS Markit analyst Piers Harding-Rolls told GameDaily that cloud gaming will be a multi-billion-dollar market by 2023, led by Sony’s efforts in the space. However, Sony has an unlikely partner in its cloud business: Microsoft.

Speaking with Fortune, Microsoft CEO Satya Nadella had a lot to say about the company’s partnership with its competitors, as well as its Azure cloud service in general. Azure has been a lucrative success for Microsoft, propelling the Xbox manufacturer to a hugely successful quarter despite dropping console sales. Nadella called the cloud “the connected tissue of this company,” adding, “The number of people who use Azure as the cloud backend for their game development is growing.”

According to Azure’s website, the platform is used by a number of other companies, among them Ubisoft, Tencent, Mojang, and Wizards of the Coast, but it’s that collaboration with direct rival Sony that made headlines. Console makers have long been engaged in a perceived “console war” since the days Sega did what Nintendon’t, but the times, they are a-changin’.

“It’s all driven by Sony,” Nadella told Fortune. “They looked at who are all their partners that they can trust… Basically and fundamentally the fact that we have a business model in the areas that they’re partnering with us, where we’re dependent on their success. So we will do the best job for them, whether it’s in cloud or whether it’s in A.I. or what have you, in order to make sure that Sony can succeed with their own IP creation.”

Of course, Microsoft makes more than just video games and systems, and cloud technology also has a multitude of uses outside of that industry. “Overall, if you look at all the parts of these businesses, whether it’s in entertainment, gaming, or the camera businesses, all of these things can use more cloud computing power. But they can also go-to-market with Microsoft in some industrial cases, especially for their things around cameras.”

That said, Microsoft isn’t about to pull a Google and go all-in on a cloud gaming future. “I don’t sort of make statements like ‘devices are not relevant’ or ‘software is all relevant.’ The mere reality is that we move between devices,” Nadella stated. Instead, he thinks it’s important to “think about both the market in that expansive way,” believing that gamers will want to move among various devices — and Microsoft is the company to lead that revolution.

You can read the full interview over on Fortune. There are still a lot of questions about the technology that need to be answered (particularly when it comes to being realistic about users’ available bandwidth), but it’s clear that ready or not, the cloud is going to play a big part gaming’s immediate future.