It’s an infrastructure service. It would be like saying Comcast “owns” Sony because Sony uses Comcast for business as their ISP. When in this transaction Sony is the customer and MS or Comcast are working to satisfy their client. MS can’t force Sony to use their product beyond offering a good service where as it would be more difficult for MS to make legitimate business reasons why it would refuse to offer the same services to Sony that they offer anyone else.

@Antwan3K:

I'm not sure you understand how Azure works.

That's not really how this works. They signed a Memorandum of Understanding basic with the "understanding" that they have a special arrangement. Sony already has a working service and other partners. They don't "have" to use Azure but it certainly makes more sense. In the event that MS tries to play hardball on prices or services Sony should be able to shift their data to other cloud providers. If anything it could reasonably be assumed that Azure won't be their only provider as Sony already has multiple ones now and this MOU only seems to apply to future agreements.

Yup, just like Amazon, RackSpace, etc.

FINALLY SOMEONE GETS IT!!!

Sony never had an extensive infrastructure because they always leased it. It really doesn't matter who it is as long as they meet the requirements they need. They already partner with AWS and RackSpace so it's not a far reach that this may be in addition to rather than immediately replacing. The press release specifically states "future" so it seems related to new cloud instances which makes sense if the underlying architecture of both systems is the same. Sony and Microsoft gain much more high availability for a lower cost by building the cloud infrastructure together. It lowers prices for both companies. Honestly, I didn't think MS would allow this but this and the move with Nintendo and as well as Xbox Anywhere seems to indicate they aren't looking to compete in the console space in the same ways and looks like a focus on Modern MS as a services company with "some" in-house hardware to keep market prices in line with what they want.

No one has enough money to support 100 million or even 50 million simultaneous users running high-end next gen gaming PCs in the cloud without charging $400-$500 upfront. You guys are grossly underestimating what even one of these blade servers costs. They're typically priced several $10,000Ks a piece.

This doesn't mean Sony won't continue to work with Amazon too. If anything it likely means Sony will spread their service across multiple providers for redundancy and maximum coverage ala Netflix.

I don't think MS is fully throwing in the towel but I would say they are at least minimizing their investment and preparing to exit if things do not pan out well.

What is more likely happening is that MS is recognizing the costs of building out a cloud based gaming service and its possible they would want partners like Nintendo and Sony to help subsidize it. It's actually very similar to what Sony already does with AWS and RackSpace where the same servers are actually used for other things besides just PSNow. That way the cost of recouping infrastructure is cheaper. In Sony and MS case the new consoles are likely similar enough architecturally to make sense for both parties.

The opposing business model would be Sony partnering with Amazon or Google and sharing servers with them while Microsoft eats the full cost of putting all the servers in themselves. In the proposed scenario Sony could continue working all a wide variety of partners while Microsoft's Azure side and high-end gaming servers it needs for XCloud are subsidized by Sony. It's unlikely any one provider would have the resources to fully provide the needed infrastructure to support millions of customers out of the gate so its a win-win for everyone involved.

Umm I don't think a single person ever claimed that. Azure network is 1000% better than anything Sony can put together, but Azure wasn't designed for running high-end games and MS has yet to actually launch a cloud gaming service yet. It sounds like the collaboration is to minimize the risk of investment in infrastructure in case of failure for both parties.

Also this.

I actually expected this from Amazon or Google, but Microsoft actually makes sense due to the requirements needed for hardware rendering.

If XboxNext and PS5 are architecturally similar, then the cost of scale for both companies running cloud based server gpus goes down. It also give MS the opportunity to scale up or drop xCloud without having to worry about the related costs of building out the hardware infrastructure and having no clients. For MS to fail in this regard both PS Now and XCloud would need to fail.

You're right and the gaping void and emptiness of some people's minds is as transparent as their posts...