POSTED BY Andrew Clark
Markus Persson, better known as Notch, created Minecraft in 2009. Minecraft is one of the most successful independent video game titles. The game is available for purchase on numerous platforms including: PC/Mac, Xbox 360, Xbox One, Playstation 3, Playstation 4, iOS and Android. As of June, Mojang had sold more than 54 million copies of the game. It is clear that Minecraft has become a cultural phenomenon known for its open world platform and sense of community, with it being arguably most popular with the younger generation of gamers. The game grew much larger than Notch ever intended, and according to an update on Mojang’s website is the reason behind the sale. Notch, and the other creative minds behind Minecraft will not be transitioning to Microsoft along with Mojang.
Microsoft’s purchase of Mojang offers them the opportunity to use Minecraft’s popularity to bolster Microsoft’s products. Microsoft has struggled to compete with Android and Apple for a share of the smart phone industry, with an estimated 3 Windows Phone in every 100 smart phones. It is hypothesized that Microsoft could use Minecraft as a means to induce sales of their struggling smart phone through unique Minecraft features not available on other platforms. However, it seems unlikely that Minecraft’s popularity could help carve out a spot in the smart phone market.
The purchase of Mojang also offers Microsoft direct access to a younger demographic that their previous products failed to access. Being able to offer unique Minecraft features on Xbox, or a Windows Phone that are not available otherwise, is an easy technique to sway children into desiring the specific product. This is a great technique as so many parents are easily swayed by their children’s desire for the latest and greatest gadgets and toys.
Because Mojang is based in Stockholm, Sweden, Microsoft can use some of its overseas cash reserves to make the purchase, and avoid any U.S. tax implications. It is expected that this deal will close by the end of the year, and will break even in the 2015 fiscal year.
