Sunday 21 September 2014

Microsoft to Purchase Minecraft Creator Mojang for $2.5 Billion

According to the reports, Microsoft Corporation (MSFT), developers of Xbox video-game console are now ready to acquire the software company, Mojang AB. This company is behind the most popular game Minecraft and now will be acquired for $2.5 billion. This was carried out in a bid with the aim to boost their Xbox and mobile business.

According to Microsoft, even though Stockholm-based Mojang will be officially joining the game-studio division of the world’s largest software developers, the company’s founder is expected to carry on with their other projects of the company.

As per the statement given by Microsoft on September 16th, this purchase is expected to be closed late this year and will be launched on 2015. This deal is being considered as the biggest deal since the change of CEO at Microsoft. This game will give Nadella, CEO, with a game which is popular and all platforms and devices made by the company itself as well as rivals like Apple etc.

This acquisition has come at the right time wherein the company is looking for investment in their Xbox strategy and trying to venture into highly competitive mobile-phone arena. Microsoft is looking forward to make Minecraft be available on all software platforms which includes personal computer, Apple iOS, Google Inc Android and Sony Corporation play station console.

Overseas Revenue: 

According to Peter Wootton, company spokesman, Redmond which is the Microsoft’s Washington based office, is planning to pay for this deal through their cash which is held overseas. This means company will have favorable tax results. According to the CEO, they don’t consider Mindcraft just as a great gaming franchise, but it is an open platform around the world and is pushed forward through a very vibrant community of people, which the company cherishes. This platform will offer vast opportunity for Microsoft as well as the community. As per the reports till June, 54 million copies of this Mojang game has been sold in all different forms.

Approach of Markus Persson

This deal was reached due to the conversation between the Majong’s founder and Microsoft regarding their experience with Minecraft on Xbox. This deal was advised by JPMorgan Chase & Co and based on this Majong agreed for the deal with Microsoft and been working on framework and pricing. According to Mojang’s co-founder Markus Persson, he is just a basic computer programmer not an entrepreneur. He stated that he doesn’t understand the concept and how it works and doesn’t want anything to come back to him.

Risks to Microsoft

Microsoft is taking a huge risk purchasing Minecraft, which is currently at the apex of popularity and Mojang without their founders may not be able to grow at a fast pace and develop sequel. Minecraft was available earlier this month on all new generation of consoles, PlayStation 4, etc.

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