Nintendo Also Reportedly Interested in Using Microsoft's Cloud Tech for Video Game Streaming

Sony isn't the only major video game company looking to work with Microsoft's Azure cloud technology. According to a source, Nintendo is also potentially working with the Xbox-maker on their powerful cloud network for the purpose of video game streaming.

Last week it was announced that Sony and Microsoft have signed a formal agreement that would let each company explore some technological development partnerships. Microsoft will get access to Sony's robust semi-conductor business, and Sony will explore Microsoft's prized Azure cloud network for gaming and other hardware.

The assumption was that Sony could utilize Microsoft's Azure cloud network to improve its own video game streaming service, PlayStation Now. Especially in the face of new competition from companies like Google.

According to analyst David Gibson, Nintendo could also be looking to work with Microsoft's Azure cloud network. In a tweet Gibson wrote, "Nintendo itself is looking also to work with MSFT (Azure) to offer its own streaming service in limited regions (JP, US etc.)" Gibson added that they couldn't rule out Microsoft or Sony's streaming services being offered on Nintendo consoles.

The reason why Sony and Nintendo could work with a console rival on cloud technology is because cloud is an area dominated by big tech companies, Microsoft among them. Amazon, Google, and Microsoft control the market for cloud networks, with Amazon's Web Services leading the pack. Cloud is the same technology that powers streaming services like Netflix, and soon video games.

Sony and Nintendo, despite having cloud streaming services already, don't have the network reach of companies like Microsoft. So rather than create their own expensive cloud network, partnering with a market player like Microsoft could be the best option.