Minecraft May Help Microsoft Build Its Mobile Strategy

Microsoft on Monday announced it has agreed to acquire Mojang, the software developer that created the popular Minecraft video game. Although it’s subject to customary closing conditions and regulatory review, the deal is expected to be finalized by the end of this year.

Microsoft will pay US$2.5 billion for Mojang and gain full control of the iconic Minecraft franchise. Most of the Mojang team will join Microsoft Studios, but company founder Markus Persson, who originally conceived Minecraft, will leave after the deal closes.

Minecraft, which allows players to build objects in an open world, has been one of the most popular independent video game franchises in history. It has been downloaded more than 100 million times on the PC alone since its launch in 2009.

It also has been among the most popular online titles on Xbox, as well as a top paid app for the Android and iOS mobile platforms.

Retail versions of Minecraft were the third-best titles for the Xbox 360 and Sony PlayStation 3, according to NPD Group.

Possibilities Are Endless

“Minecraft is one of those games that has almost limitless possibilities for creative freedom,” said Ted Pollak,senior analyst for the game industry at Jon Peddie Research.

“The demographic breadth it attracts is amazing across genders, age groups and geographies — and it, of course, runs on multiple platforms,” he told the E-Commerce Times.

It is not hard to see why Microsoft would want a bigger piece of the addictive puzzle-building game.

“Gaming is a top activity spanning devices — from PCs and consoles to tablets and mobile — with billions of hours spent each year,” noted Microsoft CEO Satya Nadella.

“Minecraft is more than a great game franchise,” he said. “It is an open world platform, driven by a vibrant community we care deeply about, and rich with new opportunities for that community and for Microsoft.”

Declaration of Independents

Microsoft Studios has produced numerous high-profile games, including the strong-selling franchises Halo, Forza and Fable. However, some smaller games from independent studios have enjoyed breakout success — especially across multiple platforms.

“Microsoft’s move to buy Minecraft developer and owner Mojang for $2.5 billion may come as a surprise to the game’s more fervent fans, but it is rooted in commercial, if not cultural, sense,” said Piers Harding-Rolls, director and head of games at IHS Electronics and Media.

“The news robustly dismisses the idea that games are no longer at the core of Microsoft’s strategic direction and also underlines the growing importance of independent titles alongside big-budget games,” he told the E-Commerce Times.

Minecraft is arguably the best-positioned independently owned intellectual property across the games sector today, Harding-Rolls added. “Minecraft is a franchise built to last, making the likely heavy investment required to secure Mojang significantly less risky than many other recent acquisitions within the games or app sectors.”

Minecraft’s Mobility

Minecraft could pave a way into mobile markets for Microsoft, given the game’s popularity on Android and iOS.

“It is big on mobile,” said Lewis Ward, research manager for gaming at IDC.

“It is one of those franchises that has a wide demographic, and it is successful on every platform it is on,” he told the E-Commerce Times. “Microsoft is trying to build its mobile and portable gaming assets, and Minecraft can help them get there.”

Through the acquisition of Mojang and Minecraft, Microsoft could find itself developing a truly popular title for its competitors — not only Google’s Android and Apple’s iOS, but also Sony’s PlayStation products. The question is whether Microsoft will continue to offer the game to its rivals over the long haul.

“Microsoft said in announcing the acquisition that they’ll support Minecraft on other platforms,” noted Ward. “It would be unusual, however, if they didn’t prefer their own platforms. It might be that they’ll support the PS3, PS4 and Vita but next year the new version — at least at launch — could be an Xbox exclusive. That doesn’t contradict what they’re saying.”

The Mind Behind Minecraft

Markus Persson, who founded Mojang in 2010 after creating Minecraft as a side project while working at another gaming studio, has announced that he will leave the company after the Microsoft deal is concluded.

Persson, who goes by the coding handle “Notch,” handed over the game’s development to Jens Bergensten in 2011, but stuck around the company because “people said I was important for the culture,” he said.

Persson intends to return to his indie roots and work on other smaller titles.

“He probably wants unbridled creative freedom in his future projects — and with a hefty treasure chest is likely to make a lot more magic happen,” added Pollak.

While it isn’t clear how much he’ll be paid in the buyout, it should be enough for him to do whatever he likes and make that magic come true.

“Notch could fund 100 other startups at this point,” said Ward, “but what is extremely unusual is that the CEO would leave a company just when getting a buyout. Usually the CEO has to stick around for a year or two to make a smooth transition. It showed how far Microsoft was willing to go to buy the company.”