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Why Does Microsoft Own Minecraft?

Microsoft owns Minecraft because they saw a lot of opportunity for higher profits by purchasing Mojang Studios (which is the company that created Minecraft) in 2014 for $2.5 billion. While a fairly huge sum of money there is a high chance Microsoft has already got all of the money they invested in it back and now they’re just turning a profit on the purchase.

Microsoft has also bought Activision Blizzard which was one of the largest gaming developers in the world. Now seeing these developments it should become more apparent to anyone that Microsoft is trying to build a soft monopoly in the gaming market. They now own some of the most popular game franchises like Call of Duty and Sekiro. The Minecraft purchase was basically a premonition of what Microsoft has wanted to achieve in the gaming market which also happens to be a very high profit branch of the software industry.

The Key Reasons for Buying Minecraft Were

  • Minecraft’s massive popularity and player base.
  • The game’s huge potential for growth and expansion (and growing it has).
  • Microsoft’s desire to to monopolize the gaming market and grow its gaming portfolio.

Popularity and Player Base

At the time of the acquisition, Minecraft was already a global phenomenon with millions of players. This large and engaged user base was extremely valuable to Microsoft, especially among younger demographics. It was basically their biggest Trojan horse inside the gaming segment after the introduction of the Xbox.

Growth Potential

Microsoft saw opportunities to expand Minecraft across platforms, into education and through merchandising. They’ve since developed Minecraft: Education Edition, expanded to new platforms like Nintendo Switch and created spin off games like Minecraft Dungeons.

Growing Microsoft’s Gaming Portfolio

The purchase helped increase and diversify Microsoft’s Xbox division and gave them a stronger presence in PC gaming. It also came as a counterbalance to Sony’s strong first party game lineup for PlayStation. If you haven’t been paying attention for the last decade, Xbox was always one or two steps behind Sony’s PlayStation so Microsoft has been trying really hard to close that gap in the console and gaming market.

Cultural Impact

Minecraft wasn’t just a game, it was a creative platform and cultural statement among young people. Microsoft understood that influence extended beyond traditional gaming.

Profitability

The initial price was really high but Minecraft has been a fantastic investment for Microsoft. It continues to generate massive amounts of revenue through game sales, in game purchases and licensing. So far Microsoft’s game related company take overs seem to be better than expected on all fronts including the Activision purchase.

Strategic Fit

Microsoft saw alignment between Minecraft’s values of creativity and open world exploration and their own focus on productivity technology. By purchasing the studio that made Minecraft they onboarded some of the talented team members into the parent company and that pays dividends to this day.

Cross Platform Potential

While Microsoft has kept Minecraft available on competing platforms, the acquisition gave them control over a game with a strong presence on mobile and other non Xbox platforms.

If I haven’t made it clear already, Microsoft buying Minecraft has been a super successful move with Minecraft’s popularity and profitability continuing to grow under Microsoft’s ownership. At that point in time, I would’ve compared it to Facebook’s acquisition of Instagram. Even though Instagram was a significantly more important purchase for Facebook (or META) than Minecraft is, it kind of created the path for Microsoft to pursue the buying of Activision Blizzard which could be compared to buying two Instagrams or Disney’s purchase of Lucas Films.

Their biggest fails however have been managing the community’s expectations and balancing the monetization aspect to match with the game’s core values. After all, there is only so much individual care a mega corporation can offer for each of its thousands of products.

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