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Sony and Microsoft to explore strategic partnership regarding cloud-based tech for gaming & AI

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Deleted member 23046

Account closed at user request
Banned
Oct 28, 2017
6,876
MXT said:
The Azure arm of MS will do everything they can to support this new, large customer. But the Xbox arm of the business still exists and that arm builds their own stuff and does not have the same costs that Sony will have.

In a future where each console is an app on your TV, where you go for your third party games matters arguably more than where you go for exclusives. One can quit the PS app and go to the Xbox app to play Fortnite 2, because the Xbox app offers something that would be too expensive for Sony to offer.

We don't know what it will mean yet for Sony to be a customer of Microsoft. Maybe Sony will be able to absorb the higher operating costs, obscure them from consumers. Maybe they won't. What we do know is that the Xbox product will have lower costs for Microsoft, as Microsoft owns what they are shipping. And that is all we know, and it is worth discussing. You know?
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Having your own infrastructure doesn't erase initial investments neither the cost to maintain it and it doesn't predict the margin you will make on the final product. It's one parameter among dozen of others. Nadella has just chosen to favor the core business of his company, corporate software and services, over the symbol.
 
MXT

MXT

Banned
May 13, 2019
646
IIFloodyII said:
I don't think it'll affect competitiveness, as it's definitely not in MS best interest to have corps using their services be less competitive.
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I agree with that, but I don't see how it can be avoided.

Manfred said:
Having your own infrastructure doesn't erase initial investments neither the cost to maintain it and it doesn't predict the margin you will make on the final product. It's one parameter among dozen of others. Nadella has just chosen to favor the core business of his company, corporate software and services, over the symbol.
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The initial investment/maintance stuff is born by the Azure business. That business is highly profitable. The stuff that the Xbox unit is responsible for is technologies relating to gaming. That stuff does not cost billions.

The cloud gaming business - not the library subscription stuff, just the actual 'I can buy a game and play it with no console needed!' - does not have a lot of moving parts as far as determining margin goes. The actual cost of building the technology and providing each user a cloud session are going to make up the vast majority of added costs retaliative to the traditional console business. There are costs involved in the traditional gaming business that go away. Best case scenario, the business winds up super profitable and the higher costs one party bares does not come into play.
 
dom

dom

▲ Legend ▲
Avenger
Oct 25, 2017
10,462
IIFloodyII said:
Ah, thanks.
Do you think both won't want to transition to something like Google has, which seems to be custom PC hardware, instead of the limited console hardware. As the console hardware route would probably be super expensive and awkward whenever they decide to upgrade.
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Nope. Sony's cost to produce this hardware is cheapest b/c they are selling millions of it already, since it's the same hardware in their consoles.
 
DigitalOp

DigitalOp

Member
Nov 16, 2017
9,292
This is dope news. All the gaming platforms are stronger together and will be stronger see they lean on each other.

My only gripe is all these mega moves from tech corps lately and I have no stock to get fucking paid lmao
 
vivftp

vivftp

Member
Oct 29, 2017
19,781
MXT said:
We don't know what Sony's expenses are, but we can infer enough to figure that they are above cost. All I am trying to do is to raise an issue, that Sony is giving up some things here that, honestly, they kind of have to give up on account of not having built a cloud business, but giving that stuff up likely will impact competitiveness or margins.
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You're trying to raise an issue... to what end? We don't know how much Sony will have to pay. We don't know if Sony will also toss their other media arms (movies, TV, music, internet TV) onto Azure to subsidize any higher expenses. We don't know if Sony will take a hit on their streaming service by covering its costs from the rest of their extremely profitable PS revenue until it's able to pull in enough numbers to generate profit on its own. There's a lot we don't know. So yeah, you've raised the issue... now what? The only thing continuing this line of discussion will do without more factual information is spiral down into a console war.

Trying to argue that Sony is at a disadvantage in a scenario like this is akin to arguing that every single company out there that utilizes Azure, AWS, Google's services and others is also at a disadvantage over those few giant companies that have the datacenters. It's a very myopic view of the overall picture IMO, especially in a scenario where we know next to nothing about the nature of the deal.
 
IIFloodyII

IIFloodyII

Member
Oct 26, 2017
24,030
domthybomb said:
Nope. Sony's cost to produce this hardware is cheapest b/c they are selling millions of it already, since it's the same hardware in their consoles.
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It's not really future proofed though is it? PS4 games already get big resolution downgrades if you stream them for example and PS3 games are literally PS3 games, warts and all. That's going to get really noticeable if Google are doing 1080p-4K at 60FPS real quick.
I guess PS5 might answer this question though.
 
MXT

MXT

Banned
May 13, 2019
646
vivftp said:
You're trying to raise an issue... to what end? We don't know how much Sony will have to pay. We don't know if Sony will also toss their other media arms (movies, TV, music, internet TV) onto Azure to subsidize any higher expenses. We don't know if Sony will take a hit on their streaming service by covering its costs from the rest of their extremely profitable PS revenue until it's able to pull in enough numbers to generate revenue on its own. There's a lot we don't know. So yeah, you've raised the issue... now what? The only thing continuing this line of discussion will do without more factual information is spiral down into a console war.

Trying to argue that Sony is at a disadvantage in a scenario like this is akin to arguing that every single company out there that utilizes Azure, AWS, Google's services and others is also at a disadvantage over those few giant companies that have the datacenters. It's a very myopic view of the overall picture IMO, especially in a scenario where we know next to nothing about the nature of the deal.
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So that the issue is raised, as I think it could be interesting to discuss. Going over the possibilities and gaming out a strategy to deal with them is more interesting than saying 'neat news, can't wait'.

We can remain above console waring if we want to. I want to and have been doing so. The idea of bringing more Sony businesses into Azure so as to have a more sizable business on the platform, to get better pricing from MS is an interesting idea. Discussing stuff like that - how the economics work for Sony is on topic and not console war garbage.

Yes, companies building cloud businesses that do not own a public cloud are at a disadvantage to competitors that do. That's just how it works. That doesn't mean the cloud owner is going to win, but if the only thing I know is that one entity owns a cloud and the other doesn't and that the business in question relies on a cloud, I know who I am betting on. In this case, we know more than that, so the conversation could be more substantive than that.
 
vivftp

vivftp

Member
Oct 29, 2017
19,781
IIFloodyII said:
It's not really future proofed though is it? PS4 games already get big resolution downgrades if you stream them for example and PS3 games are literally PS3 games, warts and all. That's going to get really noticeable if Google are doing 1080p-4K at 60FPS real quick.
I guess PS5 might answer this question though.
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I'm confident the PS5 will be the answer to those issues. It's just my personal guess, but I'm expecting the PS5 hardware (and thus PS Now) to support PS1 to PS5 games and with any luck they've also been working on an enhanced BC mode to improve the quality and performance of older games. That's my hope at least, now we just wait and see.
 
Trup1aya

Trup1aya

Literally a train safety expert
Member
Oct 25, 2017
21,400
MXT said:
1. Please do not assume what I know and what I do not know.

2. Totally possible. We don't know what the business model of the cloud gaming product of next generation is going to be. I'd rather be in a position where all doors are open to me, as opposed to one being closed on account of higher operating costs.

3. The cloud gaming product costs X to run. The goal is to make a profit. You can attempt to absorb higher prices, but there a laundry list of problems with that - we don't know enough to even speculate as to if absorbing those costs is viable. My point is that a door is being closed, not that Sony is doomed and can do nothing. Locking in higher costs than Microsoft's costs has a penalty.
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1) your comments make it pretty clear
2) what's your assumption that "doors will be closed" based on? Why do you believe Sony's operating costs will be too high?
3) it's pretty amazing to see you say we don't know enough to speculate, given your position on the matter. If the the deal didn't appear to turn profit on paper for each company, they wouldn't have signed on.

At the end of the day, it's not a novelty to see companies that compete with each other also collaborate with each other.
 
vivftp

vivftp

Member
Oct 29, 2017
19,781
MXT said:
So that the issue is raised, as I think it could be interesting to discuss. Going over the possibilities and gaming out a strategy to deal with them is more interesting than saying 'neat news, can't wait'.

We can remain above console waring if we want to. I want to and have been doing so. The idea of bringing more Sony businesses into Azure so as to have a more sizable business on the platform, to get better pricing from MS is an interesting idea. Discussing stuff like that - how the economics work for Sony is on topic and not console war garbage.

Yes, companies building cloud businesses that do not own a public cloud are at a disadvantage to competitors that do. That's just how it works. That doesn't mean the cloud owner is going to win, but if the only thing I know is that one entity owns a cloud and the other doesn't and that the business in question relies on a cloud, I know who I am betting on. In this case, we know more than that, so the conversation could be more substantive than that.
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Welp, I guess we're at the end of our discussion then. Good day to you :)


Back to the topic at hand, I can't wait until the 21st to see what info Sony discusses!
 

itchi

Banned
Oct 27, 2017
1,287
IIFloodyII said:
Ah, thanks.
Do you think both won't want to transition to something like Google has, which seems to be custom PC hardware, instead of the limited console hardware. As the console hardware route would probably be super expensive and awkward whenever they decide to upgrade.
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Consoles are already custom x86 PC hardware and it would be easy to load another OS onto the hardware (like PS3 other OS feature) and use the hardware for other stuff. This is the real advantage xCloud always had over PSNow and why Sony could never compete. Instead of the consoles sitting idle when they are not being used for streaming Microsoft will be selling them to their other Azure customers.
 
MXT

MXT

Banned
May 13, 2019
646
itchi said:
Consoles are already custom x86 PC hardware and it would be easy to load another OS onto the hardware like PS3 other OS feature and use the hardware for other stuff. This is the real advantage xCloud always had over PSNow and why Sony could never compete. Instead of the consoles sitting idle when they are not being used for streaming Microsoft will be selling them to their other Azure customers.
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You're almost all the way there. The consoles* won't exist at all. They will be PCs, in racks, tasked with whatever task a customers tasks them with. Never idle, always making money.

xCloud v2 is a VM, in Microsoft's cloud.

*Except for the console that is sold in stores to enthusiasts. That is not going away this generation.
 
12Danny123

12Danny123

Member
Jan 31, 2018
1,722
itchi said:
Consoles are already custom x86 PC hardware and it would be easy to load another OS onto the hardware (like PS3 other OS feature) and use the hardware for other stuff. This is the real advantage xCloud always had over PSNow and why Sony could never compete. Instead of the consoles sitting idle when they are not being used for streaming Microsoft will be selling them to their other Azure customers.
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Would it make more sense for Sony to transition PS OS to something like Xbox OS but with Sony's ecosystem? Therefore Sony doesn't have to run their PSNow servers inside a VM but also means that compatibility between Xbox and PS Consoles is a simple toggle and not extra development.

MXT said:
You're almost all the way there. The consoles* won't exist at all. They will be PCs, in racks, tasked with whatever task a customers tasks them with. Never idle, always making money.

xCloud v2 is a VM, in Microsoft's cloud.

*Except for the console that is sold in stores to enthusiasts. That is not going away this generation.
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XCloud is not based on PC it's based on Xbox Console hardware and OS.
 
12Danny123

12Danny123

Member
Jan 31, 2018
1,722
MXT said:
You're almost all the way there. The consoles* won't exist at all. They will be PCs, in racks, tasked with whatever task a customers tasks them with. Never idle, always making money.

xCloud v2 is a VM, in Microsoft's cloud.

*Except for the console that is sold in stores to enthusiasts. That is not going away this generation.
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MXT said:
I am referring to consumer v2 of xCloud, not the Xbox One S streaming product.



Sadly, that's not really possible, practically speaking.
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Like I say XCloud is still based on Xbox hardware. V2 of XCloud will be Anaconda based.
 
MXT

MXT

Banned
May 13, 2019
646
12Danny123 said:
Like I say XCloud is still based on Xbox hardware. V2 of XCloud will be Anaconda based.
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I am sorry, that is not the case. Consumer V2 of xCloud is powered by purpose built Azure devices that are PCs. And they are Scarlett based (but are PCs) - Anaconda is a SKU and not a platform. I know what I am talking about, please.
 
Tetrinski

Tetrinski

Banned
May 17, 2018
2,915
Anthony Hopkins said:
Phase 1 initiated.

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Had I been drinking coffee when I saw this, it would be now all over the wall lol

Phil moving the strings in all departments now at Microsoft, the best come back story since Pedro Sánchez.
 
Anthony Hopkins

Anthony Hopkins

Banned
Feb 10, 2018
17,534
I remember Peter Moore saying he thinks there was some hardware sabotage for 360s in Japan.
And now ms are selling cloud services to Sony for there PlayStation streaming.

On one hand it seems so bizarre but on the other hand it's just a ms product/service like Windows.

Xbox probably use Sony TVs
 
Vito

Vito

One Winged Slayer - Formerly Undead Fantasy
Member
Oct 25, 2017
16,102
Next gen truly is my last huh?

Hopefully Nintendo can offer at least another one after that without this.
 

itchi

Banned
Oct 27, 2017
1,287
MXT said:
You're almost all the way there. The consoles* won't exist at all. They will be PCs, in racks, tasked with whatever task a customers tasks them with. Never idle, always making money.

xCloud v2 is a VM, in Microsoft's cloud.

*Except for the console that is sold in stores to enthusiasts. That is not going away this generation.
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Yeah I see the Xbox One version of xCloud as a beta of their streaming tech and the real version will be launching with next gen. Google is using virtualization but it seems like they are still using individual 'console' like systems and bonding them together.

12Danny123 said:
Would it make more sense for Sony to transition PS OS to something like Xbox OS but with Sony's ecosystem? Therefore Sony doesn't have to run their PSNow servers inside a VM but also means that compatibility between Xbox and PS Consoles is a simple toggle and not extra development.
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Unsure, perhaps Sony will make an xCloud compatible version of their games. It would be very easy for 3rd party games as they are already making one for Xbox and xCloud the only real difficulty would be Sony 1st party.
 
DopeyFish

DopeyFish

Member
Oct 25, 2017
10,796
You know it really makes me wonder with the rumor that Nintendo is thinking of adopting XBL infrastructure. Perhaps we may be on the verge of crossplay/progression/saving after all.
 
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