November 26, 2014

Microsoft’s purchase of Minecraft puts game acquisitions into focus

Tech observers might have scratched their heads at the news that Microsoft paid more than $2 billion for Minecraft, an award-winning game that can be played across platforms. The sum of cash alone is a stunning figure, but the acquisition also raises questions about the measures tech giants will take to diversify their holdings. Even a giant company known best for its operating systems can benefit from absorbing popular, audience-rich games into its portfolio. 

Since its launch five years ago, Minecraft has sold 50 million copies and raked in $100 million last year. A building game with an element of strategy and adventure, experts have called Microsoft's purchase "unlikely," though it gives something to consider for game developers looking to hit the big time. More and more, companies like Amazon and Google are investing in games and game-streaming services, with those companies engaged in a bidding war earlier this year over Twitch. Ultimately, Amazon pulled ahead with a sticker price of almost $1 billion. 

"Minecraft is a development tool," said Jeff Teper, a Microsoft executive at a tech conference. "People build worlds out of it. If we can get eight-year-old girls and boys building worlds and getting inspired by creating content digitally, as they grow up they'll want to create in PowerPoint, or Visual Studio. And in addition to being one of the few gaming franchises that doesn't have to be freemium, Minecraft can actually charge money."

Earlier this year, Amazon also acquired Double Helix games, a gaming studio, reaffirming game development as one of its cornerstones. 

Gaming operations can bring both programming talent and luster to brands looking to expand. In 2014, the biggest gaming application story centered around the $43.3 million Kim Kardashian's app made in the third quarter. With major profits, games have never been hotter properties for technology mergers