Windows Minecraft Sale

Discussion in 'Mac and PC Games' started by TallManNY, Sep 10, 2014.

  1. TallManNY macrumors 68040

    TallManNY

    Joined:
    Nov 5, 2007
    #1
    If the rumors are true that McSft is buying Minecraft for $2 billion, then I think that is another sign of desperation by McSft. The rumors are that founder Notch is only going to help on the transition and soon after that he just takes his money and walks away (presumably restricted by some sort of long term non-compete).

    Still, this is even worse than Apple's Beats acquisition. This is tremendously popular video game. But it is one that folks outgrown and also it is based on very old technology that is fairly easily duplicated. How many years will it take to earn back and a return on $2 billion? I just don't see it happening unless Minecraft is VERY relevant ten years from now. A 15 year run for a video game would be unprecedented.
     
  2. jeremysteele macrumors 6502

    Joined:
    Jul 13, 2011
    #2
    For the most part true - but quite few games are getting up there. A few examples:

    WoW was released in 2004. Its at 10 years.

    Eve Online was released in 2003, 11 years.

    You could also argue starcraft has been going strong for over 15 years. The original is still quite popular.

    Heck even Halo/halo 2 and Half-Life 2 are still going strong, and most likely will be for a few more years.


    -----

    As far as the sale goes - gaming is one of the few areas Microsoft has excelled at for years and years. I would call it a strategic move more than anything else.
     
  3. TallManNY thread starter macrumors 68040

    TallManNY

    Joined:
    Nov 5, 2007
    #3
    Good examples. But I think only WoW continues to make the high revenue that this investment needs to justify it. And Wow has required continued full scale development and support. The amazing thing about mine craft that has made it so popular is that it has required only minimal updating. I read the company has 35 employees. The big franchises like Halo and COD have required even more continued development expenses.

    But yes very strategic. Mine craft is crazy popular with young kids. But I think most outgrow it by the time they are 12 or so.
     
  4. Solomani macrumors 68030

    Solomani

    Joined:
    Sep 25, 2012
    Location:
    Alberto, Canado
    #4
    Pixelated Lego-like building blocks game? Not only is it easily duplicated, there are like bazillions of copycat games already on the App Store made by low-budget developers.

    But really, I can't say I'm surprised by the Microsoft acquisition. After all, this is typical Microsoft move, just like they bought out Bungie and several other "trendy" game companies during the peak of their popularity.

    $2 billion is a lot of money.
     
  5. AxoNeuron macrumors 65816

    AxoNeuron

    Joined:
    Apr 22, 2012
    Location:
    The Left Coast
    #5
    Buying up "trendy" companies during the peak of their popularity...wasting billions of dollars on a company that shouldn't even be worth a third of the price they paid...

    Hmmm....that reminds me of something...I can't...quite...recall...

    [​IMG]
     
  6. Solomani macrumors 68030

    Solomani

    Joined:
    Sep 25, 2012
    Location:
    Alberto, Canado
    #6
    Well yeah, you just stated what is already known. Everyone copies Apple. Even when Apple does dumb things like buying an overhyped trendy company, another tech giant (e.g. Microsoft) will do the same exact thing one month later.

    It's like: [Microsoft] "Hey look! Apple just bought out an overpriced company for a couple billion, how dumb! OK, so how do we go about doing the exact same thing next week?"

    The tech industry is weird like that.
     
  7. theluggage macrumors 68030

    Joined:
    Jul 29, 2011
    #7
     
  8. TallManNY thread starter macrumors 68040

    TallManNY

    Joined:
    Nov 5, 2007
    #8
    Just typing "craft" into the App store pulled the well reviewed Lunacraft, Minebuilder, Survivalcraft and The Blockheads. I did not purchase or download any of these, but the pictures look like Minecraft. And, more importantly, they all have plausibly real looking reviews that state the games are comparable to Minecraft. I don't know if the physics are good enough in them to build RAM or some of the other odd stuff that can be done in Minecraft. But I don't think any of the programming would be challenging for any large game shop. That is just a guess on my part. But it is based on what I see and the plethora of copycat programs.
     
  9. phuocsandiego macrumors member

    Joined:
    Jun 19, 2012
    #9
    I'm not sure it's such a desperate move though.

    Consider these facts:
    1. Beats is estimated to have $1 billion in revenue. Who knows what their profits are since they're private. But most estimates hover around a 15% margin which puts the Apple $3 billion purchase at a roughly 5% rate of return. Not too bad for cash just sitting there.
    2. Mojang is also private but have released some details. The Wall Street Journal reported that they had $128 million in PROFITS in 2013. Who knows what their revenue was but the profit number is actually better to gauge a rate of return. Microsoft paying $1 billion for Mojang will give them about a 6.4% rate of return... again, not bad.

    Fair enough to say who knows how long that will go for. But if they can milk it for 8 years, they'll make their money back plus any goodwill from the brand and any other synergies they're trying to pull off like expanding the Windows Phone app pool. It's not a bad move or is it a desperate one. Keep in mind that Microsoft is more profitable than Apple ($22 billion net income on $78 billion revenue or about 28%). Apple has more revenue ($171 billion revenue on net income of about $37 billion or about 22%). And Microsoft gets about $2 billion a year from Android in profit for doing nothing. That will only grow over time as Android gains more market share in the lower end segment (but with a much larger user base). I wouldn't cry for either company or think either are desperate. The entire history of the two companies show quite the opposite however; Apple was desperate enough to need a huge investment from Microsoft to continue as a going concern in the 90's. Microsoft has never, ever been even near that dire strait in its entire corporate life.

    You just can't compareMicrosoft and Apple. They are different types of businesses... literally apples & oranges.
     
  10. NeilHD macrumors regular

    Joined:
    Jul 24, 2014
    #10
    My 8 year old son is CRAZY about Minecraft. It's all he is interested in. Either playing it or watching videos about it. And all his friends are basically the same.

    This is a HUGE potential market and for one reason: Merchandising.

    Seriously. There's millions of 8-12 year old kids out there who want Minecraft stuff, but hardly any merchandising for it. There's some T-Shirts and a few toys and bits but nowhere near enough, and (at least in the UK) it's all mega expensive. I just went to the Toys R Us website and searched Minecraft. 28 hits under "Toys". That's it. Moshi Monsters had 123 hits, and hits in other categories too.

    If MS sort out the merchandising - bedding, curtains, lunchboxes, clothing, stationary, greetings cards, decorations, sweets, drinks you name it they will make a bomb. Then there's going to be official books, novels, Minecraft: The Movie and so on.
     
  11. Dirtyharry50 macrumors 68000

    Dirtyharry50

    Joined:
    May 17, 2012
    #11
    I wonder if this means the end of Mac support ongoing.
     
  12. jccamp95 macrumors newbie

    Joined:
    Jan 31, 2012
    Location:
    Penticton, BC
    #12
    Once MS takes over Minecraft will require the following
    3 reboots to install, for some reason Adobe Reader is now included, Skype installed, Default search engine changed to Bing. Once installed there will be 7 patches/updates each requiring a reboot. Every tuesday there will be a patch to fix security holes, requiring a reboot. OSX and Linus support will vanish, and you will need a 5 year subscription to XBOX Live Gold in order to play. Along with 7gb of cloud space and 600mb of HDD space for install files. ;)
     
  13. Huntn macrumors G5

    Huntn

    Joined:
    May 5, 2008
    Location:
    The Misty Mountains
    #13
    Look at Landmark or Space Engineers. These types of games are the future of voxel building sandboxes. I imagine a lot of potential there.
     
  14. Soccer5se macrumors member

    Joined:
    Oct 21, 2011
    Location:
    South Korea
    #14
    Don't forget the education potential of Minecraft. I teach with Minecraftedu and it's still super popular with middle school and high school kids. I don't know what MS is going to do with Minecraft, I'm just hoping that they don't release a Minecraft 2 and stop the free updates. I don't see them improving the graphics too much because Minecraft is already a system hog. If you added 3D graphics you would need a monster of a computer to play it.
     
  15. TallManNY thread starter macrumors 68040

    TallManNY

    Joined:
    Nov 5, 2007
    #15
    We shall see. I know it is a really popular game with kids. Maybe merchandise and also cross selling to the kids will the trick. Minecraft's profits were probably pretty close to its revenue since its costs with 35 employees and basically the program not being substantially changed from year to year, it shouldn't have had too much in the way of costs. So its margins might even have been as high as 50%.

    I bet Beats margins are better than 15% by the way.

    But lets see how Minecraft does in the near future as a revenue source. I guess every year there is a new crop of 8 year olds, so there are new customers.
     

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