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'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.