Sep

27

Minecraft: How to Make $2.5 Billion in 5 Years

Mark Stephens

The purchase by Microsoft of the makers of Minecraft earlier this month for an eye-watering sum of $2.5 billion is another ‘strategic acquisition’ by one of the giants of the computing world. They are seemingly queuing up to get a bigger slice of the social media pie but how can a game be worth that sort of money and why is Microsoft prepared to pay it?

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Minecraft – from start up to monster

Minecraft was initially created by programmer Markus Persson and published by Mojang, an independent Swedish game developing company that released it in May 2009 for the PC. The developer is also responsible for the games Scrolls and Cobalt.

It was not until a year and a half later towards the end of 2011 that the full version of the game was released, along with the Android and iOS versions. Release on the Xbox 360 followed in 2012 and the Playstation in 2013.

The game is a ‘sandbox’ game where the idea is to construct whatever you can imagine – that is, if you can get past the various obstacles that are in your way, like monsters and creepers. Players use textured cubes to build in a 3-D world where they may also have to fight, explore and gather together all the things they need to complete their construction aims.

It’s a colourful and creative world. In the words of the game-makers themselves:

“Minecraft is a game about breaking and placing blocks. At first, people built structures to protect against nocturnal monsters, but as the game grew players worked together to create wonderful, imaginative things. It can also be about adventuring with friends or watching the sun rise over a blocky ocean. It’s pretty. Brave players battle terrible things in The Nether, which is more scary than pretty. You can also visit a land of mushrooms if it sounds more like your cup of tea.”

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Within a year or two of its release, Minecraft was already picking up awards, including Innovation Award, Best Downloadable Game Award, and Best Debut Game Award at the 2011 Game Developers Conference, as well as the Audience Award and the Seumas McNally Grand Prize at the Independent Games Festival.

With its burgeoning appeal on YouTube, Facebook, and Reddit, Minecraft is one of those rare games that has made the transition well from PC to console and social networks/mobile.

The game currently boasts sales of over 12 million on the Xbox 360 and 15 million on PC, with an estimated 54 million copies sold worldwide in total.

These statistics convinced Microsoft that it was worth parting with $2.5 billion worth of cash for the purchase of developer Mojang, making our Markus a very rich man. But what was really behind the purchase? Surely not just a game?

What’s the Microsoft strategy?

Microsoft has recognised the potential of collaborative communities of like-minded individuals such as Minecraft and that is probably why it has invested such a huge sum in the type of talent available at Mojang.

Rather than just buying a game to make money from, many speculate that it is the social media aspect of Minecraft that interests Microsoft. Forbes recently reported about this topic and notes:

“Minecraft reveals many of the qualities that inform true social engagement: An understanding of purpose, ways to measure progress, potential for failure (and capacity to do over), and the chance to get better through continued effort.”

The active involvement of the community of many millions engaged in the tasks on Minecraft represents the type of emotionally-engaged audience that Microsoft sees as its core audience. It represents a sustainable future for a technology giant that is managing its own transition from the explosion of the PC to the explosion of mobile.

As the Forbes article says:

“Microsoft didn’t buy a game, it bought a society-building tool.”