Microsoft to buy Minecraft maker Mojang for $3.2 billion

Microsoft said on Monday it has agreed to acquire Stockholm-based games developer Mojang and the company’s wildly popular Minecraft video game franchise for US$2.5 billion (S$3.2 billion). -- PHOTO: AFP
Microsoft said on Monday it has agreed to acquire Stockholm-based games developer Mojang and the company’s wildly popular Minecraft video game franchise for US$2.5 billion (S$3.2 billion). -- PHOTO: AFP

STOCKHOLM (REUTERS) – Microsoft Corp said on Monday it has agreed to acquire Stockholm-based games developer Mojang and the company’s wildly popular Minecraft video game franchise for US$2.5 billion (S$3.2 billion).

Minecraft – a free-roaming construction game where players can build nearly anything imaginable, block by block in a digital, Lego-like world – has spread like wildfire since its release in 2011.

Minecraft is the top paid app both on Apple Inc’s iOS and Google Inc’s Android systems. It helped Mojang, which employs just 40 people, bring in 2.05 billion krona (S$363 million) in revenues in 2013, giving the firm an 896 million krona ($126 million) operating profit for the year.

“Gaming is a top activity spanning devices, from PCs and consoles to tablets and mobile, with billions of hours spent each year,” Microsoft CEO Satya Nadella said in a statement. “Minecraft is more than a great game franchise – it is an open world platform, driven by a vibrant community we care deeply about, and rich with new opportunities for that community and for Microsoft.”

Microsoft said the Mojang team would join the studios behind global franchises such as “Halo” and “Fable” and that its investments in cloud and mobile technologies would let Minecraft fans benefit from more powerful development tools and more opportunities to connect.

In accounting terms, it expects the acquisition, which should close late in 2014, will break even in its current 2015 fiscal year.Just five years old, Mojang was co-founded by Markus Persson, who developed the hit Minecraft game after previously working at Sweden’s King Digital Entertainment Plc, maker of the Candy Crush Saga game.

News of the Microsoft deal came as a surprise to many in the gaming industry who know Persson, or “Notch” as he is commonly referred to, more for his anti-big business stance.

But he explained the reasons behind the deal in a blog.

“As soon as this deal is finalised, I will leave Mojang and go back to doing Ludum Dares and small web experiments. If I ever accidentally make something that seems to gain traction, I’ll probably abandon it immediately,” Persson said in the blog posted on his Twitter feed.

“I love you. All of you. Thank you for turning Minecraft into what it has become, but there are too many of you, and I can’t be responsible for something this big,” he said. “It’s not about the money. It’s about my sanity.”

Notch owns 71 per cent of Mojang through his company Notch Development AB and stands to become a billionaire if the deal goes through.

Analysts have said Microsoft’s purchase of Mojang is more aimed at pulling users onto the software company’s obscure mobile platform than its better known PC system or Xbox game console.

Minecraft was launched as a PC game, but about 40 per cent of copies are downloaded onto phones and tablets.Microsoft said on Monday it plans to continue to make Minecraft available across all the platforms on which it is available today: PC, iOS, Android, Xbox and PlayStation.