Microsoft launches blockchain-based royalty contract system

The tech giant proposes trialling a new system for paying licensing royalties on its online gaming platform before rolling it out to wider applications.

It’s been known for some time that Microsoft has been incubating a few different blockchain-based projects, indeed we reported it decentralised digital identities (DIDs) project back in February. Now, another of its applications for distributed ledgers has been revealed, a plan to create a new system for streamlining the complicated process of assigning and making royalty payments related to creative projects.

Built in collaboration with consulting firm EY, Microsoft plans to roll-out the system as part of its online gaming network, letting it handle the royalty issues connected with the games distributed through it.

A statement, reported by Fortune, says that “EY and Microsoft designed the solution to serve any industry where intellectual property or assets are licensed to other parties, and where the creators are paid royalties based on royalty agreements.”

The system is being built using J.P. Morgan’s Quorum platform, an enterprise-centric application of Ethereum designed for just such purposes. Microsoft says that when its new project is fully up-and-running – and if it can drum-up enough enthusiasm among content creators to get them and their managements on board, it will supersede a current system that can take 45 days to distribute such royalties, with one that process millions of transactions every day and offer payments on a daily basis.

“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, Global Innovation Leader for Blockchain at EY.

While Microsoft’s spiritual – though no longer managerial – figurehead, Bill Gates, has been less than complimentary about Bitcoin, it would appear that Microsoft’s appetite for blockchain technology continues to grow.

Alex Simons, Microsoft’s Identity Division director of program management, recently said: “Over the last 12 months we’ve invested in incubating a set of ideas for using Blockchain (and other distributed ledger technologies),” with his department working to “create new types of digital identities, identities designed from the ground up to enhance personal privacy, security and control.”

DIDs will be supported through a Microsoft Authenticator app, though the platform for that remains unclear. Microsoft has recently signed up as part of the Enterprise Ethereum Alliance, as well as using Quorum for its royalties project, hinting that its smart contract system will become its blockchain platform of choice.