Why Microsoft is basically stealing Minecraft by buying it for only $2.5 billion

So the much-rumored acquisition of Minecraft has finally come to pass, with Microsoft buying the game’s parent company Mojang for $2.5 billion, and no doubt many people unfamiliar with the game are wondering whether the software giant has lost its collective mind. How could a single game with pixelated, low-res graphics be worth that much? It doesn’t even have spaceships! And yet, those who have seen the effect the game has on kids from nine to nineteen figure that Microsoft has effectively stolen Minecraft by paying only $2.5 billion for it.

Financially speaking, the deal looks to be within the normal range for such acquisitions, at least in this somewhat over-heated tech environment, and taking into account Microsoft’s desire to expand its Xbox gaming division. Mojang had revenue of $330 million last year and a profit of $130 million, which makes the sale price about 7.5 times revenues. Many analysts say the game should fit in fairly well with the software giant’s other franchises, such as Halo or Age of Empires.

For anyone who has watched a young game enthusiast actually play Minecraft, however, those numbers are secondary to the devotion — and therefore the potential future growth — involved in the game. The number of users who have downloaded and installed the game recently crossed the 100 million mark, and that figure has been growing at rates that are almost unheard of for some time, even with other massively popular games like Tetris.

Not just a game but a platform for creativity

When I first watched my nieces and nephews and daughters playing Minecraft, I admit I was a little confused. Compared to the slick 3D graphics of games like World of Warcraft or Call of Duty, it looked pathetic — like someone had willingly gone back to playing an antiquated 16-bit game like Super Mario. Why would any gamer choose to do that? And then I actually played it, and listened to my nephews talking about strategy, and saw the things they were building.

Minecraft

Within the game environment, they were creating weapons, and tools, and buildings. It was like object-oriented programming, in some ways: by moving items into a special area and then executing certain commands, gamers could turn wood and metal into axes, or create elaborate structures and underground dungeons and even vehicles. In fact, even calling it a game understates what Minecraft is all about: to use an over-used word, it’s arguably more of a platform.

Using the Lego-like building blocks and processes that are part of Minecraft, almost anything is possible. In fact, several players have used these building blocks to construct functioning hard drives — albeit small ones — that can actually read and write data. This is inside a “game.” In many ways, Minecraft feels a little like earlier virtual worlds like Second Life, in the sense that it allows an enormous freedom for users to create.

And for me, that’s where the value of Minecraft lies — in the openness of the game platform (which Microsoft will hopefully allow to continue). Games like Halo and Call of Duty are extremely addictive, and the virtual worlds they take place in are vast, but only in Minecraft can any player modify that world to an almost unprecedented extent. And the creativity that allows for is the addictive part, not the gee-whiz graphics or the shooting or the back-story.

Minecraft even outgrew its own creator

So if Minecraft is such an amazing platform, why was Microsoft able to buy it so cheaply? Judging by a blog post that creator Markus “Notch” Persson wrote about the sale, it’s pretty clear that he was what they call in the industry a “motivated seller.” The Swedish developer says he never intended to create something so huge — and suggests that the responsibility of managing it, or even being seen as its creator, became too much for him to handle. As he put it:

I’ve become a symbol. I don’t want to be a symbol, responsible for something huge that I don’t understand, that I don’t want to work on, that keeps coming back to me. I’m not an entrepreneur. I’m not a CEO. I’m a nerdy computer programmer who likes to have opinions on Twitter… if I ever accidentally make something that seems to gain traction, I’ll probably abandon it immediately.

Like so many incredible products and services (including Twitter, I would argue) the success of Minecraft is a lesson in how openness — and what looks like an almost pathological lack of control — can create the perfect environment for massive popularity. To take just one example, Persson’s lack of interest in building a huge money-making product led to a laissez-faire attitude towards piracy that only served to make his game even more addictively popular.

Hopefully, Minecraft’s story will encourage more developers — and in fact content creators of all kinds — to focus less on the money-making aspects of their creations and more on giving users the tools to create a community, one that can exercise its own creative impulses. That’s where the true magic lies.

Post and thumbnail images courtesy of Shutterstock / Feng Yu