Xbox and Sega are said to be exploring the possibility of a strategic partnership to produce games on the Microsoft Azure cloud platform.
The yet-to-be-titled game will be part of Sega's 'Super Game' initiative, which is designed to create community-based online games based on existing game franchises.
Sega first showcased this initiative last May to its investors. They made 'Super Game' their priority for the next five years.
"We are excited to announce today that we are considering a strategic alliance with Microsoft to help develop Sega's 'Super Game' initiative as well as build the next-generation game development environment," said Yukio Suino, President of Sega.
"With this alliance we will leverage Sega's powerful game development capabilities and Microsoft's advanced technology and development environment," he added.
Sega itself is known for its various popular games, for example Sonic the Hedgehog and also the Yakuza game series which has recently become quite popular.
According to Sega, this alliance plan could be the future of gaming, because they are currently exploring the process of developing cloud-based games.
"Sega has played an iconic role in the gaming industry and has been a great partner for many years," said Sarah Bond of Microsoft in a statement.
"Together with (Sega) we will rebuild how games are created, marketed and operated, with the aim of providing more value for players and Sega," he added.
Previously, Microsoft also had a similar partnership with Sony. Namely developing new technology for cloud-based gaming services.
This step seems to have been taken by the two companies to overtake Google, which some time ago showed off a similar service called Stadia. This collaboration itself is unique, because PlayStation and Xbox are practically rivals in the console game business.
"(This collaboration) will greatly contribute to the development of interactive content," said Kenichiro Yoshida, CEO of Sony in a press statement released by Microsoft.
Sony and Microsoft signed a memorandum of understanding that allows the two companies to join forces in the development of future cloud solutions using Microsoft Azure, which will be used to support their games and content streaming services.
The memorandum of understanding states that Sony will also use the Azure data center for their existing game streaming services.