Accountants HATE them: Microsoft's Xbox harnesses blockchain to pay games publishers

But it used to use Excel and print-outs, just like us normies

Cheque, photo via Shutterstock

All aboard the blockchain hypewagon – Microsoft announced today that it has begun using the technology to deal with royalty and digital rights contracts.

While the shiny toy, which runs on Azure (of course), is interesting, lurking within the excited ramblings was an admission of how Xbox game publishers used to get their payments. It appears that humans within the bowels of Microsoft had to study PDF files, deal with printed documentation and make do with manual Excel spreadsheets to reconcile and recalculate royalty payments.

"It's expensive to manage," admitted Rohit Amberker, finance director for Royalties and Content at Microsoft. Expensive and time-consuming, since publishers wouldn't get the royalty information until 45 days after the month ended.

It is surprising that it has taken until now to deal with the problem.

The software giant buddied up with financial services firm EY (formerly known as Ernst & Young) to develop the network using the Quorum blockchain on Microsoft's Azure platform.

Blockchain, for those who have managed to evade the Bitcoin excitement over recent years, can be thought of a distributed digital ledger of transactions, which carries a permanent and cryptographically secure record of what data was stored when and by whom.

Obviously, care needs to be taken with what actually gets stored in the blockchain for fear of waking the GDPR troll, slumbering under the bridge.

For its part, Microsoft is very proud of its new technology, pointing out that automation has meant the PDF files and spreadsheets are no longer required. The ledger exposes the underlying data, allowing stakeholders to see how the payments are being calculated and statements generated, as well as what is making publishers the most money, without having to wait 45 days.

The additional transparency won't do trust any harm either.

While Xbox royalty payments are being dragged out of the Stone Age using blockchain, the idea of using the technology this way is hardly new. The likes of PeerTracks and its offshoot, MUSE, have been promoting blockchain as a technology to ensure rights-holders get paid quickly when their music is streamed. Like Microsoft's solution, the technology should store transactions in an immutable and transparent way.

After several years of delays, the MUSE project finally showed signs of life earlier this month. Adoption by the larger players in the music industry will dictate if the service ends up being as revolutionary as its supporters promise.

In the meantime, publishers on the Xbox games platform can revel in transaction-level data about their wares as sales happen thanks to blockchain and Azure.

Others may wonder why PDF files, print-outs and manual Excel spreadsheets endured so long. ®




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