Microsoft and Sega Explore Cloud Gaming Alliance to Develop Big Budget Titles

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Sega Sammy said Monday that it is considering a strategic alliance with Microsoft to use Xbox maker’s cloud gaming technology to develop big budget titles.

Tokyo-based Sega is investigating the production of titles with global reach on Microsoft’s Azure cloud platform, it said in a stock exchange statement, without giving any further details, including whether a deal is an exclusivity for the title or one Would involve capital investment.

The Sega share rose 6 percent in morning trading.

Microsoft’s own major cloud gaming initiative is available through Xbox Game Pass, a cross-platform subscription service that offers Sega titles such as the successful “Yakuza” series.

Cloud gaming disconnects bulky hardware, but requires a fast internet connection. Microsoft’s foray into the emerging sector comes as Xbox is widely viewed as backward in the console battle with Sony’s PlayStation.

“By working with Microsoft to anticipate these trends that will continue to accelerate in the future, the goal is to streamline development processes and continue to provide high quality experiences for players using Azure cloud technologies,” said Sega.

For decades, rumors have been circulating about a tender for “Sonic the Hedgehog” publisher Sega from Microsoft. Japan, the world’s third largest gaming market and a major innovator in the industry, remains a weak spot for the Redmond, Washington-based company.

The two companies have a long history of partnership, with the announcement Monday after a number of critically acclaimed recent Sega releases, including the series “Persona” and “Total War”.

Sega, who gave up its own console business after a series of flops, is a prolific maker of “pachinko” machines for gaming and has expressed ambitions to make its video games more attractive.

© Thomson Reuters 2021

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