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Microsoft and Sony Find Common Ground

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May. 29 2019, Published 5:27 p.m. ET

Microsoft and Sony agree to work together

This month, Microsoft (MSFT) and Sony (SNE) announced a strategic partnership that will see them collaborate in semiconductors, AI, cloud-based solutions for their gaming and content services. Although Microsoft and Sony compete in many areas, the companies have decided to work together in some to take advantage of each other’s unique strengths.

This partnership news comes as the companies are battling escalating competition in key areas. Microsoft, for instance, is locked in a tight race with Amazon (AMZN) and Google (GOOGL) for dominance of the global cloud computing market. Amazon finished the first quarter with 35% of the global cloud market, Microsoft came second with 15% of the market, and Google held ~7%, according to Synergy Research.

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Sony keen to turn tables on Netflix and Samsung

Sony is battling strong competition from Netflix (NFLX) and Samsung (SSNLF) in the online video and television set markets, respectively. In 2015, Sony launched PlayStation Vue, an online video service that is still struggling to catch up with Netflix. According to eMarketer, PlayStation Vue finished the first quarter with 800,000 US subscribers, while Netflix had 60.2 million subscribers.

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