MINECRAFT $2.5B DEAL MICROSOFT’S MOST SUCCESSFUL ACQUISITION?

176 million copies of Minecraft have been sold on various platforms, making it the most popular game of all time. However, can Minecraft be regarded as Microsoft’s most successful acquisition?

When Microsoft paid a stunning $2.5 billion for Mojang in 2014, many people were taken aback. The main reason for this was Microsoft’s track record of underutilization of acquired businesses.

We’ve watched the demise of Nokia’s mobile phone company, which Microsoft purchased for $7.2 billion, in the last several years. After spending $8.5 billion acquiring Skype, Microsoft’s former CEO Steve Ballmer was still disappointed.

After seven years, it’s time to assess if Microsoft’s acquisition of Minecraft was the right one, or if it was just another misstep.

Minecraft’s Initial Profits

At its inception in 2009, Markus ‘Notch’ Persson set out to develop a 3D sandbox game that relied only on the player’s ability to think on their feet.

It was a straightforward game with no overarching plot or goals; instead, players were free to do whatever they wanted while playing. There were later versions of Minecraft servers like Kohi that provided users with additional tools like click test to help them improve, but the game itself remained unchanged during this period.

Since its release in early 2011, it has become one of the best-known and most popular indie titles. Within two months of its beta release, Minecraft had sold a million copies. The beta edition of the game generated $33 million in revenue.

Markus created a game studio called ‘Mojang’ to continue the development and updating of Minecraft with the profits from the game’s sales.

Mojang released the game in its entirety in November of that year. By February 2014, Minecraft had more than 100 million registered players.

Mojang declared a profit of $126 million in 2013, but Microsoft announced that they would buy Minecraft for $2.5 billion, which was over 20 times that amount.

After the Acquisition, Minecraft

In terms of sales, no other game has come close to matching what Minecraft has achieved.

Exceptionally High Sales Volumes

Between 2016 and 2019, the official sales figures are astounding. Game of the year winner Grand Theft Auto V has sold more than 110 million copies worldwide.

After Microsoft’s acquisition of Minecraft, the game has sold approximately 100 million copies. And that alone generates revenue of nearly $1.5B.

As a result of these sales, there was a lot of buzz around the official Minecraft World Lego sets, merchandise and even novels.

The localised version of Minecraft, dubbed Minecraft China, was released by Mojang in 2016 in an effort to further penetrate the huge Chinese market. Within a year of its release, the game was available on every major platform. In November of this year, the number of Minecraft players in China surpassed the 300 million mark!

Trying out new areas

As a result of Minecraft, Microsoft was in a position to enter new markets, such as ed-tech. In 2016, Minecraft: Education Edition was released, a version specifically designed for classroom use. ‘

The $5 one-time licence fee covers the cost of the education edition. There were 2 million licenced users in November 2017, which translates to $10 million in extra revenue for Minecraft Education Edition.

Despite Microsoft’s own success in the gaming industry, the acquisition of Minecraft allowed the company to profit from the sales of its own rivals, such as Sony and Nintendo. Because Halo is exclusive to the Xbox, Microsoft couldn’t do that with it.

Fortnite’s throne must be reclaimed.

It seemed that Minecraft would fade into obscurity after the release of Fortnite in July 2019. It also served as a reality check for Microsoft’s plans for Minecraft.

For some reason, as the number of players on YouTube increased, so did interest in Minecraft videos. In fact, Minecraft videos were the driving force behind the game’s popularity in the early years (and it happened again!).

Since Minecraft has become so popular, programmers have created more tools based on the game, such as cps tests, colour code generators, and other modpacks.

“Growth in Minecraft views on YouTube has been accelerating over the past two months – in May, views of MC content on YouTube were up 8 percent compared to the prior year.” This summer is going to be huge!

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