In context: One of Microsoft's most heavily-promoted Xbox Series X features is "Smart Delivery," which grants Xbox One users next-gen versions of select games at no additional cost. While not mandatory for developers to support, Microsoft is reportedly pushing more teams to either use it or offer their own free alternatives.
To accomplish this task, the tech giant has allegedly placed restrictions on how publishers are allowed to handle next-gen upgrades. As we said, they are not required to use Smart Delivery to grant customers next-gen game upgrades, but according to Hot Hardware, they also cannot charge for those same upgrades.
For example, if you purchased Assassin's Creed: Valhalla on the Xbox One X, Ubisoft could not then ask you for an extra $10-$20 to unlock basic Xbox Series X features, such as performance or graphical boosts. Of course, we're only using Valhalla as a hypothetical example here -- the game has already been confirmed to ship with Smart Delivery support.
If a developer does decide to skip Smart Delivery for one reason or another, it needs to have a different -- but functionally similar -- system in place to issue no-cost next-gen game upgrades to users.
EA is doing just that with its "Dual Entitlement" program, which lets you snag a copy of, say, Madden NFL 21 on current-gen consoles and receive a free next-gen version up until the launch of the next game in the series, Madden NFL 22. It's not quite as sweet a deal as Smart Delivery, but it's close enough for Microsoft, it would seem.
It's unclear what sort of consequences (if any) publishers will face for refusing to abide by Microsoft's preferences regarding next-gen upgrades, but perhaps we'll find out in the future.