Sega and Microsoft team up on cloud gaming

1 Nov 2021

Image: © Savvapanf Photo/Stock.adobe.com

Sega wants to develop new titles in the cloud gaming space using the Microsoft Azure platform to reach gamers around the world.

Japanese video game maker Sega is partnering with Microsoft and exploring ways to develop new titles in the cloud gaming space using the Azure platform.

Part of an initiative called Super Game, Sega is looking to take advantage of the growing cloud gaming space, where users can stream games on their devices without downloading them, and build a global online community of Sega game players.

Future Human

“The goal is to optimise development processes and continue to bring high-quality experiences to players using Azure cloud technologies,” Sega said in a statement.

Yukio Sugino, president and COO of Sega, added that the new strategic alliance aims to advance Sega’s game development and see its titles be enjoyed by fans across the world. “We aim to build an alliance that utilises both Sega’s powerful game development capabilities and Microsoft’s cutting-edge technology and development environment,” he said.

Microsoft first announced in August that it was bringing a new cloud gaming service to its Xbox devices later this year. Currently only available on mobile devices and PCs, the service will land on the Xbox Series X and Xbox Series S consoles as well as older Xbox One machines soon.

Other major tech players in the cloud gaming sector include Google with its Stadia platform and Amazon’s Luna platform. Streaming giant Netflix is also dipping its toes into the gaming industry.

Gaming deals

Microsoft has been involved in some major moves in the gaming industry recently, including the $7.5bn acquisition of Bethesda, the game studio behind Fallout and Doom. The deal was the biggest gaming acquisition in Microsoft’s history and could give Xbox a major advantage in terms of exclusive releases.

Earlier this year, it was said to be in discussions to acquire messaging platform for gamers Discord in a $10bn deal, but talks reportedly ended in April.

The deal with Sega, of which not much information has been made public yet, could be a sign of a deeper relationship between the two companies. According to Reuters, a bid by Microsoft for the Sonic the Hedgehog maker has been rumoured for decades, but never materialised.

Sarah Bond, corporate VP at Microsoft who leads the gaming business development team, said that Sega has played an “iconic role” in the gaming industry and been a “tremendous partner” of Microsoft over the years.

“We look forward to working together as they explore new ways to create unique gaming experiences for the future using Microsoft cloud technologies. Together we will reimagine how games get built, hosted and operated, with a goal of adding more value to players and Sega alike.”

Microsoft’s cloud services stood out as the big earner in the company’s first-quarter results published last week. Intelligent cloud revenue jumped by 31pc, while the Azure business and other cloud services grew by 48pc.

Xbox hardware revenue was up 166pc and content and services revenue was up 2pc. Microsoft said it sold more Xbox S and X consoles in the first quarter than it expected.

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Vish Gain is a journalist with Silicon Republic

editorial@siliconrepublic.com