Jimmy and Sean disagree on whether or not it was wise of Microsoft to purchase Mojang for $2.5 billion
Welcome to Maximum's inaugural Maximum Debate article, a new opinion column where two Maximum PC editors duke it out over a specific topic. This time around, Online Managing Editor Jimmy Thang and Contributing Editor Sean Knight debate the merits of whether or not it was a good idea for Microsoft to purchase Minecraft developer Mojang for $2.5 billion dollars.
Read through the debate below and let us know where you stand by voting in our poll at the end of the article or by leaving a comment.
Sean's opening statement:
Microsoft's recent acquisition of Minecraft developer Mojang has been the subject of many discussions lately. While the acquisition of Mojang is a good move on Microsoft's part, the company paying $2.5 billion for the developer has surprised everyone. It's a lot of money for a small developer with one successful game, so far, under its belt. But is Microsoft's acquisition of Mojang worth it?
I personally think that this deal is definitely worth it for the company. Not only is Minecraft a very popular title, but it has been downloaded 100 million times on the PC and, last we were told, had sold around 54 million units total over the various platforms it is on. It is a juggernaut that has captured the attention of not only older gamers, but the next generation of gamers, and there is no sign of its popularity waning anytime soon.
Should we be counting our chickens yet?
Jimmy's opening statement:
To put how much money 2.5 BILLION dollars into perspective, that's roughly 2.5x the amount Amazon bought the world's most popular game streaming website Twitch for (which some suggest is also too much). In general, if you were to ask me about all these massive tech buyouts, I'd say it's unsustainable and is a bubble just waiting to burst, but that's a different matter.
Off the top of my head, I'd say there's really only three current gaming franchises that are perhaps worth that pretty penny moving forward: League of Legends, Dota 2, and the World of Warcraft. Like Minecraft, all those aforementioned games have a large player base, but unlike the Mojang-developed title, they are cash cows that consistently bring in revenue via either a monthly subscription or micro-transactions. They are, for the most part, rock solid revenue generators. As Minecraft stands right now, you spend $20-something bucks and you're all set. I would imagine Microsoft will try to monetize the game further with micro-transactions, but considering that most of the Minecraft audience isn't used to that business model, an abrupt shift could be off putting and hurt the existing community. Furthermore, how do we know that Minecraft hasn't hit critical mass and reached saturation? While you could also say that of the other aforementioned games I've mentioned, I'd argue that they're still safer bets considering they bring in a constant barrage of money via micro-transactions each month from huge user bases.
That's not to say that Minecraft isn't a cash cow in its own right. Considering the game has sold 54 million copies to date across all platforms, it's certainly also in a league of its own. But when you crunch the numbers, there's still a steep hill to climb in making $2.5 billion moving forward.
Considering the game sells for $27 (with the mobile and console versions being significantly cheaper, but we'll disregard that), total revenue equates to around $1.4 billion in a best-case scenario. This is no small chunk of change, mind you, but that's still more than $1 billion shy of what Microsoft paid for the developer, and roughly the amount Microsoft had to lay down to resolve that nasty red ring catastrophe with the Xbox 360. And again, who's to say that Minecraft hasn't already reached critical mass?
I can understand why Microsoft would want Mojang and Minecraft, but in my humble opinion, they should take a lesson on learning how to buy low to sell high.
A storm is brewing over this debate
Sean's rebuttle:
Minecraft is far from reaching critical mass. There is still a huge market for it on PCs, consoles, and mobile devices. It's safe to say that Minecraft has been a cash cow for Mojang as well. In addition to selling the game, there are LEGO Minecraft sets and a variety of merchandise such as plushies, hoodies, foam pickaxes, keychains, stickers, cups, caps, and more. On consoles, there are texture packs that are being sold to gamers and even themed-texture packs for games such as Halo. As for mobile devices, the pocket edition is in the Top 10 apps for both Android and iOS devices on a consistent basis. So imagine if Microsoft were to start offering mobile users texture packs for sale?
But Microsoft could take things even further. Just look at its Halo franchise. That franchise has had a webseries, will have a live TV series debuting later this year, and a Halo channel that will be launching soon. A Halo channel dedicated solely to Halo! So I wouldn't be surprised if we saw something similar with Minecraft from cartoons to, as crazy as it sounds, a movie.
Minecraft may not have a story, but this game is appealing to a ton of kids. Kids who tend to go on YouTube to watch Let's Play and Minecraft-related videos. That is the target audience Microsoft will, presumedly, focus on. An audience that will continue to grow unless Microsoft screws things up.
We also have to look at China, now that Microsoft's Xbox One has just launched there since the country's 14-year ban on consoles has been lifted. So far, there are only 10 games available for the Xbox One in China and titles such as Halo are not among them due to Chinese regulators being wary of violent games. This means that Minecraft could easily be brought over to the Chinese market.
I also believe that Minecraft is the equivalent of Nintendo's Mario and LEGOs rolled into one. For many, Mario was the gaming icon for a generation of gamers while LEGO continues to be relevant and profitable because it appeals to the imagination of children. Minecraft is this generation's Mario and could have the endurance similar of that to the LEGO brand. Microsoft just needs to be smart and continue to cultivate the audience that has grown around Mojang and Minecraft.
Does the deal provide endless possibilities?
Jimmy's rebuttle:
While it is debateable whether or not Minecraft has reached critical mass, Mojang did lose its prominent founder Markus "Notch" Persson, which would be akin to the Mario franchise losing Shigeru Miyamoto (game designer behind Mario and Zelda). In other words, it's a big blow to the franchise. And without Notch's presence, who's to say Microsoft won't screw the franchise up? After all, they turned Rare from the beloved developer of Goldeneye to an average developer making mediocre Kinect games.
Before Microsoft bought Rare
In regards to your comments about them being able to push Xbox Ones in China, I highly doubt it will have much of an impact unfortunately due to the high amount of piracy that happens there.
After Microsoft bought Rare
Moreover, if Minecraft falters, they have no other established IPs to rely on considering Mojang has ever only made one game. Talk about putting all your eggs in one basket. When Activision acquired Blizzard, at least they got WoW, StarCraft, and Diablo.
Do these swords look like they are worth $2.5 billion to you?
And sure, they can try to make a Minecraft TV show (though I find that a little challenging considering, as you mentioned, there is no story to Minecraft) and they'll continue to sell Minecraft foam axes and whatnot, but call me skeptical, but I don't think they'll be able to sell $2.5 billion worth of it.
That's what we think anyways, what do you think? Vote in the poll below!
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