Microsoft set to disclose $2.5bn Minecraft deal

 
Oliver Smith
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Minecraft was launched five years ago as a PC game (Source: Getty Images)
Microsoft is expected to announce a $2.5bn (£1.5bn) takeover of Mojang, the Swedish video game developer with 100m players of its Minecraft game, as soon as today.

The deal is aimed at pulling users on to the US software company’s mobile platform Windows Phone, which commands only around 2.5 per cent of the world’s smartphone market, accord­ing to tech research firm IDC.

Minecraft was launched five years ago as a PC game, but 54m sales later, about 40 per cent of copies are downloaded on to phones and tablets.

Markus Persson, Minecraft’s creator and co-founder of Mojang, said last year that Windows phones were so insignificant in terms of market share that it wouldn’t be worth developing a version of his hit game for the platform.

Microsoft looks set to change this with its takeover, acquiring Mojang’s 40 staff and spurring development of the game on its own mobile platform.

“We don’t view this acquisition as a signal of Microsoft’s intent to double down on Xbox but consider it an attempt to better address mobile on a cross-platform basis,” said Nomura analyst Rick Sherlund in a note to clients this week.

“This also appears to be consistent with (Microsoft) chief executive Satya Nadella’s mobile and cloud strategy,” he added.

The deal is relatively small for Microsoft, which has $86bn in cash and short-term investments, and last year bought the handset division of Finnish mobile firm Nokia for €5.44bn (£4.33bn).

But it is relatively large and expensive for game company acquis­itions, which do not have a stellar record of success.

Japan’s SoftBank paid $1.53bn for a 50 per cent stake in Finnish game- maker Supercell last year at about 3.5 times projected annual sales. Elect­ronic Arts’ $750m acquisition of PopCap in 2011 was valued around 10 to 11 times sales.

Microsoft declined to comment on the deal.

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