It is expected Sony will use Microsoft’s Azure cloud service to host its upcoming PlayStation streaming service.
Microsoft has been trialling a streaming offer of its own, under its Xbox brand.
The firms said they would also work together on semiconductors and artificial intelligence applications.
"For many years, Microsoft has been a key business partner for us, though of course the two companies have also been competing in some areas,” said Kenichio Yoshida, Sony’s chief executive.
