Microsoft to buy ‘Minecraft’ creator for $2.5bn

Microsoft CEO Satya Nadella is making his first major acquisition, and it’s not what you would have expected.
Microsoft is buying Mojang for $2.5bn Mojang is the Swedish company behind massively popular game Minecraft. This acquisition is not a complete surprise since it was reported last week.
What is Minecraft? The Guardian had one of the best explanations last year: “Minecraft is, at its heart, a building game where players construct their own world out of blocks, making anything from a forest to the Eiffel Tower, like a kind of digital Lego without an instruction book. In a world of shoot ‘em up games with ever sharper graphics and more realistic gore, Minecraft stands out as a quirky outsider.”
The game is massively popular. In February, its developer, Mark “Notch” Persson, tweeted that 100 million people downloaded the game, with 14.3% paying for a copy of the game. Minecraft reportedly earned $100 million in profits last year.
Persson will not be going to Microsoft. Neither will any of the other cofounders of Mojang. They are all going to work on their own projects.
In a blog post explaining why they sold, Mojang says Minecraft became too big.
“[Notch] decided that he doesn’t want the responsibility of owning a company of such global significance. Over the past few years he’s made attempts to work on smaller projects, but the pressure of owning Minecraft became too much for him to handle. The only option was to sell Mojang. He’ll continue to do cool stuff though. Don’t worry about that.”
The reaction to this deal is overwhelmingly positive. On Twitter, Re/code reporter Peter Kafka calls Minecraft a “giant, growing, profitable business, at a price that will allow acquirer to break even next year.”
Jonathan Glick of Sulia compares Minecraft to Legos. And Ben White at Politico says kids are “totally crazy” for Minecraft.
Here is Microsoft’s press release on the deal:

REDMOND, Wash. — Sept. 15, 2014 — Microsoft Corp. today announced it has reached an agreement to acquire Mojang, the celebrated Stockholm-based game developer, and the company’s iconic “Minecraft” franchise.

The Mojang team will join Microsoft Studios, which includes the studios behind global blockbuster franchises “Halo,” “Forza,” “Fable” and more. Microsoft’s investments in cloud and mobile technologies will enable “Minecraft” players to benefit from richer and faster worlds, more powerful development tools, and more opportunities to connect across the “Minecraft” community.

Under the terms of the agreement, Microsoft will acquire Mojang for $2.5 billion. Microsoft expects the acquisition to be break-even in FY15 on a GAAP basis. Subject to customary closing conditions and any regulatory review, the acquisition is expected to close in late 2014.

Available across multiple platforms, “Minecraft” is one of the most popular video games in history, with more than 100 million downloads, on PC alone, by players since its launch in 2009. “Minecraft” is one of the top PC games of all time, the most popular online game on Xbox, and the top paid app for iOS and Android in the US. The “Minecraft” community is among the most active and passionate in the industry, with more than 2 billion hours played on Xbox 360 alone in the past two years. Minecraft fans are loyal, with nearly 90 percent of paid customers on the PC having signed in within the past 12 months.

“Gaming is a top activity spanning devices, from PCs and consoles to tablets and mobile, with billions of hours spent each year,” said Satya Nadella, CEO, Microsoft. “Minecraft is more than a great game franchise – 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.”

“The ‘Minecraft’ players have taken the game and turned it into something that surpassed all of our expectations. The acquisition by Microsoft brings a new chapter to the incredible story of ‘Minecraft,’” said Carl Manneh, CEO, Mojang. “As the founders move on to start new projects, we believe the high level of creativity from the community will continue the game’s success far into the future.”

Microsoft plans to continue to make “Minecraft” available across all the platforms on which it is available today: PC, iOS, Android, Xbox and PlayStation.

“‘Minecraft’ is one of the most popular franchises of all time,” said Phil Spencer, head of Xbox. “We are going to maintain ‘Minecraft’ and its community in all the ways people love today, with a commitment to nurture and grow it long into the future.”

More details will be available upon the acquisition closing.