Sony and Microsoft are competitors in the gaming industry, and gamers are used to viewing these two corporations as rivals. Today in a surprise announcement, Sony and Microsoft announced that both companies will be working together going forward, lending each other their unique strengths to further their collective technological abilities.

Bringing the power of Azure and Azure AI to Sony to deliver new gaming and entertainment experiences for customers https://t.co/cMRKFE74Yk

— Satya Nadella (@satyanadella) May 16, 2019

According to the press release for this announcement, the “memorandum of understanding” between Sony and Microsoft specifically focuses on the “joint development” of cloud-based solutions using Azure, Microsoft’s own cloud computing service. Sony will be using Azure for its own game and content-streaming services and is looking to build better tools for content creators using Sony’s devices. Both companies also plan to work together to further their collective research on AI and semiconductor technologies. These developments would eventually benefit both Microsoft’s enterprise customers and owners of Sony’s consumer electronics.

President and CEO of Sony Kenichiro Yoshida stated in the announcement that “PlayStation itself came about through the integration of creativity and technology. Our mission is to seamlessly evolve this platform as one that continues to deliver the best and most immersive entertainment experiences, together with a cloud environment that ensures the best possible experience, anytime, anywhere.”

Yoshida also talked about the relationship Microsoft already has with Sony and acknowledged the competitive spirit between them in the gaming industry. “For many years, Microsoft has been a key business partner for us, though of course the two companies have also been competing in some areas,” Yoshida stated in the announcement.

I believe that our joint development of future cloud solutions will contribute greatly to the advancement of interactive content.

Microsoft CEO Satya Nadella added that “Sony has always been a leader in both entertainment and technology, and the collaboration announced today builds on this history of innovation.”

Our partnership brings the power of Azure and Azure AI to Sony to deliver new gaming and entertainment experiences for customers.

Phil Spencer, Head of Xbox, tweeted about his support and enthusiasm towards the new partnership between Sony and Microsoft, making specific mention of their shared “gaming ambitions.”

Excited about the opportunities ahead with @Sony for us to pursue our mutual gaming ambitions and delight players around the world. https://t.co/3vBuQiruiR

— Phil Spencer (@XboxP3) May 16, 2019

It remains to be seen exactly what results from this new strategic partnership from Microsoft and Sony, or what the partnership will mean for Sony’s streaming service PlayStation Now. Microsoft is also planning its own streaming service called xCloud, which will be a direct competitor to Google’s Stadia.

Microsoft plans to make its presentation at this year’s E3 a “big one,” but Sony decided to sit this one out. They have however been sharing details about their next-generation console, PlayStation 5. Recently during a talk at the Tribeca Film Festival, Hideo Kojima made some mysterious comments about his upcoming title Death Stranding, connectedness and new ways to experience games, but didn’t want to reveal Sony’s plans for the game too early. Maybe Sony and Microsoft are cooking something truly special up for their gaming consumers with this new partnership.