This is actually an area where I think Sony has dropped the ball; PS Now is an interesting service, and they have a pretty interesting catalog of older games from the PS2/PS3 era. But they don't advertise it well enough, and I don't think they put enough focus on new releases and keeping them available the way Microsoft does with Gamepass.

There's rumours of them revamping PS Now and PS+ into a new service.

I've heard these, and they should! It would give them direct competition to GamePass Ultimate, which is a tier of service they don't currently offer (unless you buy PS+ and PS Now as separate subscriptions).

I assumed Sony were migrating to or already using Azure at this point.

https://news.microsoft.com/2019/05/16/sony-and-microsoft-to-...

At the time Microsoft where not throwing so much money at games development an IP ownership. I wonder how Sony feel about this now.

I see. But because they're maintaining datacenters for PS3/PS4 streaming I think they have the potential to go hosted, at the end of the day multiplayer servers are developer-controlled and network servers (e.g.: PSN, Xbox Live) are mostly identity services and such. (Even matchmaking isn't the network's job anymore)