Microsoft has teamed up with Ernst & Young (EY) to create a new system that delivers royalties to game developers through blockchain technology. The move is predicted to slash operating costs by automating the majority of the royalty management and remittance service, much of which is currently performed manually.
Xbox Used as A Guinea Pig
The new service will be built on top of JP Morgan Chase’s Quorum blockchain using Microsoft Azure Cloud. Initially, it will be used on the gaming platform to handle royalty payments for video game publishers. One of the biggest publishers to support this new technology is Ubisoft. The company raked in over $1.65 billion in sales last year, with its biggest titles including Far Cry, Assassin’s Creed, Prince of Persia, and the Tom Clancy series.
Once Microsoft and EY perfect the technology, it will then be rolled out across Microsoft’s entire range of products, such as Bing, MSN, and Office. Arguably, using the gaming system as a test ecosystem is a bold step, given how vocal the gaming community can be when services are down, meaning there is little room for error or bugs.
Microsoft Aren’t Alone
The war of the consoles has been raging since time began, and there is no exception when it comes to blockchain adoption. Back in April 2016, Sony applied for a patent on a blockchain powered digital rights management tool. Sony’s proposed blockchain technology would prohibit users from exploiting glitches whereby content could be paid for once and played across multiple systems by multiple users. In order to prevent this, Sony’s blockchain would use a set of public keys to verify the account playing the game is the account that purchased it – a totally different blockchain approach to Microsoft.
Will the Blockchain Solution Change How Consumers Buy Games?
It won’t have any effect on how consumers buy games from the Xbox store, there is a high chance consumers won’t even notice it is live. It is designed to be the licensing and royalty remittance version of Ripple, reducing operational efficiencies and streamlining the costly manual reconciliation process.
The current process involves the manual remittance of billions of dollars every month, and this process can take as long as 45 days from the sale of a game on the Xbox store to funds in the developer’s accounts. This blockchain solution provides the ability to make this process nearly instant, meaning developers have more incentive to focus time creating games for Xbox rather than its competitors.
Will Microsoft Start Accepting Cryptos on Xbox Store?
Given Microsoft’s stance towards crypto, it is unlikely that they will start accepting cryptos anytime soon. Back in May, Microsoft announced a ban on all crypto ads on their search engine – Bing – starting from July. This blockchain implementation seems to be purely a remittance service, unlike the e-commerce giant Fancy. Fancy just announced they will be accepting Bitcoin Cash in addition to Bitcoin following a payment gateway provider change. While accepting cryptos doesn’t seem to be something Microsoft is working on, we can’t rule it out for the future.