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TOKYO (Reuters) – Sega Sammy Holdings on Monday said it is exploring a strategic alliance with Microsoft (NASDAQ:MSFT) to develop big budget titles using the Xbox maker’s cloud gaming tech, driving anticipation the move could signal a deeper tie-up.
Tokyo-based Sega is exploring making titles with global reach on Microsoft’s Azure cloud platform, it said in a stock exchange statement without providing further details, including whether a deal would involve exclusivity for the titles or capital investment.
Sega shares jumped 6% in morning trading.
Microsoft’s own major cloud gaming initiative is available via the Xbox Game Pass, a cross-platform subscription service which features Sega titles such as the hit “Yakuza” series.
Cloud gaming cuts ties to bulky hardware but requires a fast internet connection. Deep pocketed Microsoft’s push into the nascent sector comes as Xbox is widely seen as being on the backfoot in the console battle with Sony (NYSE:SONY)’s PlayStation.
“By working with Microsoft to anticipate such trends as they accelerate further in future, the goal is to optimise development processes and continue to bring high-quality experiences to players using Azure cloud technologies,” Sega said.
A bid for “Sonic the Hedgehog” publisher Sega by Microsoft has been rumoured for decades. Japan, the world’s third largest gaming market and a major innovator in the industry, remains a weak spot for the Redmond, Washington-based firm.
The two firms have a long history of partnership with Monday’s announcement coming after a string of critically acclaimed recent releases from Sega including in the “Persona” and “Total War” series.
Sega, which abandoned its own console business after a string of flops, is a prolific maker of “pachinko” machines for gambling and has flagged its ambitions to widen the appeal of its video games.
