Microsoft Using Blockchain for Gaming Royalties

Microsoft and Ernst & Young are expanding their blockchain solution to embrace royalties management and gaming rights. They have made their solution on the private Quorum network, and it allows them to create a financial system for the automatic distribution of royalties, contract creation, and other forms of payments.

According to Cointelegraph Microsoft will use the new solution specificallyfor its Xbox gaming partners. This embraces its vast network of artists, musicians, writers and other content creators. It allows Microsoft to properly track, manage and process payments for royalty contracts.

This way the blockchain provides all the information all parties need in real time. It's 'a single source of truth'. Blockchain technology allows for the automation of many processes, not only making the business more transparent, but also more efficient.

The development of major Microsoft games like for example Halo and Flight Simulator, comes with all kinds of issues in regards to gaming royalties. Blockchain technology can help Microsoft to speed up their gaming royalties distribution process by 99 percent.

Royalties in gaming

Paying royalties in the gaming industry is often a time consuming process. Company need to keep track of the music, images, textures and other elements they license from third parties. There are all kinds of licensing deals, ranging from pay-per-play to unlimited usage. Over the years there have been plenty of cases where licensing deals between artists and gaming companies caused issues. Think about the radio stations in Grand Theft Auto or the music games Rock Band and Guitar Hero. These games were filled with licensed music and yet still these products caused all kinds of legal disputes between artists and gaming companies.

From a gamer perspective however, the blockchain royalties solution doesn't add any new experiences. These blockchain solution merely make content production easier. However, blockchain technology also allows gaming companies to elevate their community from mere consumers into participants of a virtual economy. Gamers can become creators and earn revenue over their in-game creations. Through blockchain technology content creators for The Sandbox earn a small percentage on every secondary sale.

“In my opinion, NFTs have the most potential of all since they can enable royalties to be redistributed to the IP holder on every secondary trade between users.”

Sebastien Borget, president Blockchain Game Alliance - to Cointelegraph

What are non-fungible tokens?

A non-fungible token or NFT is a contract on the blockchain that represent a digital asset inside a game or virtual world. This contract can state all kinds of meta data, like for example its strengths, weaknesses or superpowers. Or, more general, the contract address of the original creator and a revenue share over secondary sales. This last piece of information will allow marketplaces to automatically pay out any royalties from sales done through their marketplace.

You can't swap a non-fungible token one-on-one with another non-fungible token. It represents something unique. That’s why non-fungible tokens can be based compared with rare art, an owned house or a signed mint edition of a certain comic book. These products are unique and in the same way a non-fungible token is unique as well. This gives non-fungible tokens also an unique value that only represents that one specific token.

Read more about NFTs here.