Sega Sammy announced on Monday that it is exploring a strategic alliance with Microsoft to develop big-budget titles using the Xbox maker’s cloud gaming technology, fueling speculation that the move signals a deeper partnership. According to a stock exchange statement, Sega, based in Tokyo, is considering developing titles with the global appeal on Microsoft’s Azure cloud platform, without providing further details, such as whether a deal would include exclusivity for the labels or capital investment. Sega’s stock rose 6% in morning trading.
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Microsoft’s primary cloud gaming initiative, Xbox Game Pass, is a cross-platform subscription service that includes Sega titles such as the famous “Yakuza” series. Microsoft’s entry into the nascent sector comes as the Xbox is widely perceived to be trailing Sony’s PlayStation in the console battle. Cloud gaming does away with the need for bulky hardware, but it does necessitate a fast Internet connection.
“The goal is to optimize development processes and continue to deliver high-quality experiences to players using Azure cloud technologies by collaborating with Microsoft to anticipate such trends as they accelerate further in the future,” Sega explained.
Microsoft’s bid for Sega, the publisher of “Sonic the Hedgehog,” has been rumored for decades. Japan, the world’s third-largest gaming market and a significant industry innovator, continues to present a challenge for the Redmond, Washington-based company. The two companies have a long history of working together, with Monday’s announcement coming on the heels of a string of critically acclaimed recent Sega releases, including the “Persona” and “Total War” series.
Sega, which abandoned its own console business after a string of flops, is a prolific manufacturer of “pachinko” gambling machines and has expressed a desire to broaden the appeal of its video games.