Thread by @ConcourseOpen

New Sony and Microsoft partnership to explore new innovations could result in a shared #Ethereum-based licensing system for video games.
And evidence suggests that’s just the beginning...
news.microsoft.com/2019/05/16/son…

To sum up the partnership deal between Sony and Microsoft, both parties are interested in exploring research together to support their respective game and content-streaming services. Sony and Microsoft will also explore collaboration in the areas of semiconductors and AI.

On its face, this deal makes complete sense because almost every gaming platform is focussing on the future of streaming games from the cloud. But we did a little digging and Sony seems to have more in mind for Azure… But first we have to go back

In June 2018, Microsoft and EY announce they've been working to solve the complicated and costly process of managing licenses for intellectual property "first being deployed within gaming with Microsoft and its game publisher partners"
ey.com/en_gl/news/201…

Ubisoft, member of the Blockchain Game Alliance and vocal proponent for cloud gaming and digital collectibles, has been helping test this new system. "The underlying network is built using the Quorum blockchain protocol and Microsoft’s Azure cloud infrastructure"

Quorum is the permissioned version of Ethereum designed for enterprises by JP Morgan.
Quorum is also EY's preferred choice of private blockchain. That being said, EY truly prefers the Ethereum mainnet.

It’s no coincidence that since the publication of this quote EY has been making great strides regarding privacy and scalability solutions for enterprise clients on the main Ethereum network...

Earlier this year, EY announced Nightfall, a standard for private transactions built for enterprise-use of the Ethereum mainnet, and made it clear that it wants its clients to use Ethereum’s public blockchain for business
ey.com/en_gl/news/201…

Take it from Paul Brody, EY’s Leader of blockchain technology, "When we looked around, we realized quite quickly that Ethereum is the right platform and tokens ... we built all of our business applications in the Ethereum ecosystem."

Brody also shed some light on what enterprise users need to be comfortable using the Ethereum public mainnet:
1. Tokenization
2. Regulatory compliance
3. Privacy

Paul Brody elaborated that EY is working on make it hard to beat their economy of scale. “For most companies, by the end of this year doing business on a public blockchain will be cheaper than doing it on a private blockchain.”

EY has made leaps forward in scaling and privacy tech in the last year. “It cost $100 in gas to do a ZKP transaction... We are now down to about $5 in gas consumption for a ZKP transaction… our goal is to get down to probably under $0.50”

EY’s is so determined in its goals of getting enterprise to use Ethereum that they are putting their money where their mouth is and giving away Nightfall for free, no strings attached. As Brody puts it:

“If we want this to happen, we cannot keep it for ourselves. We need to make it public. And so, when we release Nightfall .. it will be open source and public domain. No license. No gotchas. No special terms and condition. … We relinquish all ownership of Nightfall.”

Microsoft and EY aren’t the only two with their eyes set on DRM on the blockchain. Sony previously filed a patent application for ‘Blockchain-based digital rights management,’ which seems like a straightforward system to manage users' rights to content.
patents.google.com/patent/US20180…

“This new system is based on Sony and Sony Global Education’s previously developed system for authenticating, sharing, and rights management of educational data, and additionally features functionality for processing rights-related information.” sony.net/SonyInfo/News/…

A better cost-saving DRM management system would greatly impact a global media company like Sony. Sony is the largest music publisher in the world and owns the rights to massive catalogues of movies, television shows, and software, as well as their games. reuters.com/article/us-son…

Sony also filed a patent application that would use blockchain and cryptographic proofs to determine when content has been delivered to receiving consumer devices; this fits into their blockchain DRM model. i.e. verifying streaming content proofs on-chain
patentimages.storage.googleapis.com/70/28/36/02154…

Here’s where it gets really interesting. On Oct 25, 2018, Sony Interactive Entertainment LLC filed patent applications for a ‘Collaborative content creation system’ and a ‘Blockchain gaming system’. patents.google.com/patent/US20190… patents.google.com/patent/US20190…

We’re going to break down the ‘Blockchain Gaming System’ patent application first. In general, it describes using blockchains to manage the rights and ownership of “video game objects, video games, video content, audio content,” mimicking existing relationships in the industry.

“Video game objects” appears to the primary focus of this patent. Sony wants to introduce tokenized items into their games. Players could access, buy, sell, or transfer in-game items, currencies, and content through Sony’s platform regardless of their device's manufacturer.

You may be saying: Who cares about a private Sony blockchain? But that’s where you and Sony might agree! Sony’s plans involve breaking free from the siloed systems of old. Some phrases in the patent application imply the system will be public, or at least interoperable.

This section describes perfectly the problem users face with siloed digital content. Sony wants to improve customers’ accessibility to their property across content delivery services.
🤔 Ethereum could serve as the secondary market “not governed by a particular platform.”

Sony explicitly references "the ownership of game assets that can be used within one or more games that exist outside of the system," which implies that these tokenized items will be interoperable with other systems. Maybe Ethereum or maybe Microsoft's Ethereum-based Quorum

Tokenized items can be pre-allocated in familiar situations such as DLC, micro-transactions, and retailer promotional items. Publishers could issue items to players for purchases, achievements, playtime, in-game activity, etc. This is where things get interesting though.

Sony may want to use your future PS5 to mine their blockchain. This may be limited to providing your access to the blockchain and signing transactions for these blockchain systems.

It may be possible to lend your unused processing power to other services or users in exchange for tokens. Your idle processing power could help you buy that rare weapon you have been grinding for.

Tokenized items could enable unique gameplay scenarios like never before.Tokenized items could be staked on games in the hopes of generating a better reward.Or tokenized items or characters could be destroyed forever when they are lost in battle, raising the stakes of some games.

Sony’s system isn’t just decentralized on an individual level. Sony describes DAO-like systems where users can vote on items to be included in expansion sets and game balancing decisions. This is where we need to discuss the second patent application...

Sony’s ‘Collaborative Content Creation System’ is a system designed to allow users to collaborate in the process of creating software, particularly video games and in-game items. The system also includes a module to compensate users for purchases or use of their contributions.

Contributors are compensated for the quantity and quality of their work. There would be rating systems to determine quality. Users could also modify existing content. Each item would have a contributor history. You might get paid for content inspired by and created from your own.

A curation process is outlined where users propose desired content, contributors make the desired content, play-testing is performed, content is incorporated into new or existing games or services, and then contributors get paid their portions for each sale

One specific reason Sony partnered with Microsoft is to explore Azure’s AI capabilities. This may very well be the case, because this system heavily relies on AI as part of the content creation, play-testing, and curation process.

Sony plans to use AI to test the gameplay mechanics of the collaborative items or games created through this system. Sony may even offer you rewards for running simulations on your PlayStation. This could allow devs to test future features in the background while you play.

Most importantly though, Sony plans to use AI to generate content. With each new design, game mechanic, or art style taught to it by contributors, the AI’s knowledge base from which it can draw for inspiration grows. Users who inspire the AI could be compensated as well.

For users looking to contribute, there’'ll be tools, communities, and marketplaces where you can put your skills to good use. User- and AI-generated content will help game devs fill in the holes of their skillsets. And best of all, players will get more options in games.

Under Sony’s vision, you could carry your favorite sword from game to game. Or you could opt in or out of content packs full of your favorite community-made items to incorporate into your game. Adding new content to multiple games could be as simple as a ticking a checkbox.

Sony is positioning themselves to capture a share of tokenization in gaming. They are designing a content-making machine that will help them make use of gaming hardware as we enter the era of cloud gaming.

Speaking of the cloud, "In some implementations, the system host makes a share of the proceeds from selling content, which will encourage more people to set up system hosts," further supporting the idea that it’ll be interoperable. Although, the context of system host is unclear.

What is clear is that a leaked set of slides from a Sony presentation confirms Sony’s future reliance on streaming. It also seems to confirm our theory describing “New Entitlement models” and “Evolved services” as new engines of growth. tinyurl.com/y4eal6zx

This isn’t Sony’s first run-in with Ethereum, either. Sony Pictures and Sony-owned Fox teamed up with Greenfence Consumer to create promotional digital collectibles.
deadline.com/2018/08/deadpo… prweb.com/releases/block…

These digital collectibles were deployed on and authenticated by the Ethereum blockchain using ConsenSys’s Kaleido, which helps business launch applications on the Ethereum blockchain.

Fast forward to March 14, 2019 - Kaleido announces that it is supporting Microsoft Azure
kaleido.io/borderless-blo…

Between Google's Stadia, Apple's Arcade, and Amazon pursuing new cloud gaming services, it is no wonder Sony and Microsoft are teaming up to try and maintain their share of the marketplace. Gaming consoles as we know them are going away.

Games as a Service and monetization of in-game items are the new trend in gaming. Consoles are becoming the portals to your service. And when you make your money from software sales, cross-platform partnerships simply give your customer more access to your service.

A recent Supreme Court ruling against Apple may open the door to courts forcing hardware manufacturers to allow third parties to open stores on their hardware; that would just be one more nail in the coffin.
engadget.com/2019/05/13/sup…

And now there is a rumor circulating that Nintendo may be joining this Azure party...

https://twitter.com/gibbogame/status/1129198153289195521

Xbox Live did recently expand its services to Android, iOS, and Nintendo Switch. Cross-platform play is becoming more common nowadays. And oh hey! Would you look at that? The Sony applications happen to include Nintendo hardware as well.

This latest rumor is especially intriguing due to the fact that early rumors about the Nintendo Switch suggested it would use a ‘supplemental computing device’ to give it cloud gaming capabilities, not unlike Sony’s idea of using idle CPUs and compensating users.

Sony clearly understands the potential of blockchain. And the recent partnership will advance AI and network infrastructure. But is Azure a part of their blockchain goals too? Do you think Sony and Microsoft will use a shared DRM system built on Ethereum in the future?