A big deal went down yesterday. A $2.5 billion deal to be precise. It was expected as news had leaked prematurely last week, unexpected as the most radiant example of indie glory opted to sell out to Microsoft (by many perceived as the antithesis of indie). The Windows makers now owns Mojang and more importantly controls Minecraft. The latest sales figures put Minecraft sales at 54 million as of June this year (12 million on Xbox 360 and 15 million on PC), but sales have continued well beyond these numbers and with the game launching on PS4 and Xbox One recently it's likely we're approaching 60 million copies.
So how will Microsoft make money from Minecraft and what plans do they have for it going forward? We don't know. It's entirely possible no-one really knows. Strange when we're talking about a $2.5 billion deal, but the nature of what Microsoft have bought probably means that both parties need a little time to take stock of the situation. Clearly Minecraft is of tremendous value (and it keeps on selling), but how does Microsoft best use their new asset and how will Mojang fit into the Microsoft Game Studios landscape?
Critics will likely point to Microsoft's purchasing of Rare and Lionhead as examples of studio mismanagement. The two British studios have had various issues over the years, and where Rare turned from makers of highly appreciated core titles during their N64 heyday to a studio that's been spearheading the much loathed Kinect initiative of casual games. Lionhead in turn became a Fable factory and lost much of its name talent (as did Rare over the years). But these are rather old acquisitions and lately Microsoft haven't been buying many high-profile developers. They've picked up smaller indie studios Press Play and Twisted Pixel who have largely been kept as independent studios with little or no direct control from up top.
In terms of manpower and size, Press Play and Twisted Pixel are more similar to Mojang than Rare or Lionhead. Of course, the size of Minecraft itself will likely result in Microsoft adopting a more hands-on approach.
Phil Spencer, resident good guy at Microsoft, was tasked with breaking the news even if the deal is likely less of an Xbox deal and more of a Microsoft deal. The reason being they wanted to avoid as much backlash as possible, because negativity is something that comes with every major piece of Microsoft news these days - especially when it involves potential exclusivity (down the line in this case).
Will Minecraft change? Yes. It's inevitable. It has changed a lot from the early alpha days of total independence to the advent of mobile and console versions. Change is one thing we can be sure of. However, it should be noted that Jens Bergensten, who has headed Minecraft development for quite some time now, will remain at the helm of Minecraft development. Notch left Minecraft behind a long time ago, and by his own admission remained largely as a culture bearer and perhaps unwillingly as a symbol of sorts.
When Notch and his fellow founders decided it was time to exit Mojang they really only had one option and that was to sell. They couldn't very well close down the company (that would have been financially unwise, unfair to their friends working at Mojang) and give the game to the community in its entirety (much of what Minecraft is already in the hands of the community, so it would basically just be the final piece of the puzzle). I have no idea what the process was like searching for a partner. It has been suggested that Notch sought out Microsoft directly and that there really wasn't any bidding. That the relationship with the publisher of Minecraft on Xbox 360 and Xbox One was such that he (and perhaps the rest of Mojang) felt it would be a good fit. I only have the feeling that had it been an open bidding process, someone else might have won. Afterall, Microsoft haven't been very aggressive with developer acquisitions as of late.
Minecraft merchanise is rather popular and likely brings in a substantial income to Mojang today. The approach hasn't been as wide as say Rovio with Angry Birds, but it proves the commercial success of the phenomenon isn't exclusively tied to the game itself. There's Lego Minecraft, which in many ways is a brilliant hybrid between old and new. Microsoft likely wants to launch a new Minecraft at some point, a Minecraft 2.0 if you will. I have the feeling that Mojang themselves were happy to simply update, build on and iterate the game instead of releasing sequel, but there is something about launching a new product that makes sense to someone who has spent $2.5 billion.
Mojang are located in Stockholm, Sweden. A hotbed of game development that sees DICE, King, Mojang, Paradox Interactive, Avalanche Studios, Arrowhead Game Studios, Starbreeze Studios and many more situated in an area only a few square miles big. There is a good mix of big (King, DICE), medium (Avalanche, Paradox Interactive), and small (Arrowhead, Fatshark) sized studios - of publisher owned outfits, publishers, indies, work for hire, mobile. And while Mojang may have been the shining star of independence, in a way a first-party studio completes the landscape.
Mojang itself is not a large operation, unlike Rovio who invested their Angry Birds success into a multitude of directions, Mojang kept it fairly small and manageable. As a result their operating profit is ridiculously high, but there may be some unexploited potential in terms of further merchandising and new business areas. Stockholm could also be seen as a great spot for a Microsoft first-party studio as there is plenty of talent to pick up in nearby studios, even if that is likely a secondary consideration for Microsoft Game Studios. Markus Persson never had a commercial vision for Minecraft - he simply wasn't an entrepreneur but a programmer at heart, he and those who helped him realise Minecraft gave us something and were repaid with unimaginable riches (read up on his reflections on leaving - given his record of straight shooting there's no real reason to second guess his motives). Now all that remains is to see if Microsoft can capitalise on the popularity of their new acquisition, and earn back the hefty price tag in the coming years.
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