I just don't see how the partnership benefits MS. Sure they get some money in the short term, but how does it benefit them in the long term? In the upcoming streaming service war between Google Stadia, MS xCloud, and PS Now, Sony basically wasn't even a true contender due to poor server coverage and dated technology compared to Stadia and xCloud. How does it benefit MS in the true battle against Google, to give the 3rd place contender a major leg up? xCloud was not far enough behind Stadia in terms of technology for this partnership to benefit MS in any way from what I can see, in fact statements from the xCloud team suggested that xCloud had the advantage against Stadia, using less than half the data as Stadia, which would have given them a big advantage since many ISP's have small data caps. It just feels to me like Sony is using MS and MS is getting nothing worthwhile in return.
You are looking at it the wrong way. MS is a big competitor to my company but they are also one of our biggest vendors. Its crazy how business works. We directly compete against MS but we also used primarily their software. Not only that we have a partnership with MS to sell Biztalk as one of our integration platforms all the while we use that very same software to gain advantage over MS and the software that we compete with. Its the nature of MS that they are in so many different markets that they would also compete and help their competitors.
For MS, Sony will be a huge company that will help sell Azure to other clients and increase their Cloud initiative. Sony will provide the needed tech for MS for their consumer based productions allowing them to compete better with Google, Apple and probably even Sony in that area. Each company understand where they compete but also understand where they can leverage each company strengths to make both better. Who knows, maybe Sony, MS and Nintendo will combined Like Earth, Wind and Fire to become Captain Planet and produce one console to rule them all.