Microsoft has just spent $2.5bn on
Mojang, a company that is effectively a single videogame. Why? Well, because
it’s a deal that goes far beyond gaming.
There’s been no shortage of reports
suggesting that Microsoft is a spent force, that the days of it dominating the
marketplace are coming to an end, and that the once-world conquering firm is
being out thought by nimbler competitors.
In truth, there’s something to that: Windows 8 seems to be fighting an
uphill battle that it’s showing little sign of winning, Apple and Android
operating systems are in control of the portable operating system market and a
resurgent Sony is landing heavy blows on Microsoft’s Xbox One console. With
Bill Gates and Steve Ballmer gone, it’s proven a tricky time for Microsoft, and
it’s not always found it easy to redefine it.
Yet, lest we forget, for all the
negative talk, Microsoft is a cash- rich company - and it’s a
business that’s getting richer. In the company’s latest round of financials,
published back in July, it was revealed that in one three month period,
Microsoft brought in $23.38bn in revenue. Of that, $4.6bn was profit. In three
months! That’s record earnings (although not record profits) at a time when
Microsoft is perceived to be in trouble; lots of companies would like to be in
that much trouble.
Lob what brickbats you like at
Microsoft, it will tend to its wounds with the $1 5bn+ of profit it’ll be
making this year. To put that stupidly large number into perspective: a cash
injection of that size into the UK economy could knock 4-5% off the income tax
rate overnight.
What’s more, Microsoft’s earnings are
broad. The PC market still accounts for a sizeable amount of its cash, and
computers are still in demand (growing demand, of late). The Xbox One is doing
decent numbers, whilst Microsoft is finally seeing some of the fruits of its
decision to buy up Nokia and its Lumia phone range. Cloud service take-up is
proving to be very lucrative as well.
Yet there’s also a problem. Microsoft isn't world leading at too much any more, and that wasn't always the case. In
particular, it’s feeling the pinch in both mobile and gaming, and as such, it
needed to do something about it. Time to go shopping, it would seem.
Minecraft
By the time you read this, three weeks
will have passed since Microsoft opened its petty cash jar, and found $2.5bn
lying around. It put that $2.5bn to reasonable use too, buying up a company called
Mojang. Many of you will have heard of it, some will have not. More of you,
we’d wager, will be familiar with Minecraft, a game that’s increasingly
an addiction for many youngsters. Put simply, Minecraft is a modern
phenomenon —
and
Mojang’s main product. From humble beginnings and entirely independent
foundations, Minecraft has gone on to
become one of the most played videogames on earth.
Minecraft
was
originally the brainchild of a man called Markus
Persson, better known by his online
handle of Notch. Persson came up with the idea while working for other
companies, wanting a game that took him back to the days of playing with LEGO,
yet married up to a compelling videogame.
It took a game called Dwarf Fortress
to ultimately bring Persson’s idea into focus. Boasting a stylized (yet
deliberately not cutting edge) graphical look, Dwarf Fortress focused on
the game itself rather than making it look spangly. Minecraft would
follow a similar ethos, with Persson quitting his job in 2009 in order to
accelerate the development of what would become Minecraft. The first playable version appeared on
May 17th 2009, but initial interest in Minecraft
was
tempered.
However, by the middle of 2010,
Minecraft had been noticed. As Mojang, the company set up by Persson, recalls
on its official history page, servers crashed in September 2010 due to the
sheer number of people trying to sign up to play the game. Then came the
YouTube videos of people’s Minecraft projects (some of which are really
quite staggering). Then came the awards. Then, in November 2011, the game got
its first full official release. Also that year. tablet versions of Minecraft,
for Android and iOS, were released, and the Xbox 360 version would follow
in 2012. Minecraft was on its way
to becoming a multi-platform phenomenon.
Word Of Mouth
Interestingly, for a game in the modern
era, Minecraft had become a sensation — not by way of
it being subject to a massive marketing campaign (bluntly, when have you ever
seen a Minecraft billboard?) but through sheer word of mouth. It now
takes near residence in the top paid for app charts on Android and Apple’s App
Store, while the PC version continues to notch up huge numbers of downloads.
In 2012, Minecraft arrived on
the Xbox 360. Microsoft claims (and, as is its way, it has the power to monitor
such things) that its seen over two billion hours of gameplay attributed to the
title on the console alone since then. Not for nothing is Minecraft comfortably one of the most popular
games on the Xbox 360. PlayStation versions have rolled out too in more recent
times. Everyone wants a slice of Mojang’s creation.
In all, Minecraft has been
downloaded over 100 million times, and it’s one of the most popular videogames
on the planet. Rumors had been circling for some time that Microsoft was
interested in doing a deal with Mojang for the game, and all that gossip came
to fruition on September 15th, 2014, when the deal was confirmed. One of the
biggest independent success stories of recent times was really to become part
of one of the biggest corporations on Earth.
