Yahoo Finance Microsoft to use blockchain technology to pay game developers
Microsoft will collect royalty payments for game developers using blockchain, an encrypted record system that is logged across multiple computers, in one of the first real-world uses of the technology by a major technology company.
The software giant aims to streamline the current process of tracking and collecting copyright payments, which has long relied on a series of middlemen and which critics say shortchanges creators.
Its use of a blockchain ledger will replace the time-consuming manual system of spreadsheets which means game publishers currently have to wait 45 days for royalties. Microsoft said the blockchain-based solution will let it offer royalty information in near real time.
Microsoft will begin deploying the tool with its large network of gaming publishers and distributors, and is already experimenting the tech with one of its gaming partners Ubisoft to implement it.
The companies will sign up and agree to new business terms and conditions with with Microsoft through smart contracts, which use the blockchain technology.
This means when consumers buy their content online or from retail stores, the transactions will be recorded on the blockchain and royalty amount decided as per the smart contract. The gaming publishers and distributors will have access to all relevant data.
Furthermore, the company stated it views the technology, which it designed with consulting firm EY, will be appropriate for any creative industry, not just gaming.
Rohit Amberker, finance director at Microsoft’s royalties operations, said: “After adopting the blockchain solution, even with only one-third efforts, we’re able to run the same royalty operations while providing faster, more reliable service.”
When the project is fully deployed, the company predicts it will be able to process millions of transactions a day. The system, which relies on a species of blockchain technology known as Quorum, is also designed to protect confidential business arrangements. It will run on Microsoft Azure, the company's cloud computing service.
The software company deploying smart contracts will also m automate a wide variety of transactions between different parties.
This method would suit paying royalties for videogames as a number of creators can be involved in the product. For example if a video game features a musical clip this could need payments to the software developers, the songwriters, the performer and so on.
“The scale, complexity and volume of digital rights and royalties transactions makes this a perfect application for blockchains. A blockchain can handle the unique nature of each contract between digital rights owners and licensors can be handled in a scalable, efficient manner with an audit trail for the participants,” said Paul Brody, EY’s head for blockchain.
