Microsoft Close To Acquiring Minecraft-Developer Mojang AB

Chuck Bednar for – Your Universe Online
Microsoft is currently in talks to buy Mojang AB, the Swedish video game developer behind the popular “Minecraft” title, and a deal could be completed by the end of the week, the Wall Street Journal and other media outlets reported Tuesday.
According to the Journal’s Evelyn M. Rusli, Shira Ovide, Sven Grundberg and Joann S. Lublin, unidentified sources with knowledge of the negotiations said the two companies were engaging in “serious discussions” about a potential acquisition valued at more than $2 billion. Neither party would comment on the speculation.
“A sale would be a surprising turn for closely held Mojang, whose 35-year-old founder, Markus Persson, has shunned outside investment and is revered in the videogame community for railing publicly against big firms, including Microsoft,” according to the Journal reporters. “Meanwhile, ‘Minecraft’ could reinvigorate Microsoft’s 13-year-old Xbox videogame business by giving it a cult hit with a legion of young fans.”
Mojang has reportedly sold more than 50 million copies of the open-ended, Lego-style construction game since releasing it in 2009, and last year Persson’s company earned over $100 million in profits from software and merchandise sales. Minecraft is available on Xbox, Sony’s PlayStation, PCs and mobile devices, and has “struck a chord with children and hard-core gamers alike,” the Journal reporters noted.
Andrew Trotman of The Telegraph explained that Microsoft is looking for a boost in its video game division. While Microsoft announced in April that it had sold five million Xbox One game consoles worldwide, Sony revealed last month that it had sold twice that number of PlayStation 4 units. Nonetheless, he said that the hefty price tag will likely cause concern among analysts who fear that technology companies are over-valuating game makers based on the success of one or two titles.
“Buying Minecraft would make a lot of sense for Microsoft,” Bloomberg reporter Ashlee Vance said. “For one, the company has billions upon billions of dollars in overseas cash that it wants to spend and few targets worth buying. In Minecraft, Microsoft would get a game that has taken over the lives of children around the world and brings in about $100 million a year in profit. It’s a huge hit on the Xbox as well as mobile devices and the PC.”
Vance wrote that adding Minecraft to its software catalog would “provide Microsoft with a massive, growing audience,” and that in those respects, the purchase is similar in some ways to the Redmond, Washington company’s 2011 acquisition of Skype. The purchase, while not finalized, would come just a few months after Microsoft closed a $7 billion deal to acquire Nokia’s handset business, added USA Today’s Brett Molina.
However, it would be the first multibillion-dollar acquisition by Satya Nadella, Microsoft’s new chief executive, since he took over the company’s reigns in February, Rusli, Ovide, Grundberg and Lublin said. They added that the purchase would also be unexpected, since while Nadella said that he views video games as a way to expand Microsoft’s representation in the PC and mobile device markets, he has not indicated that he viewed Xbox as a core business for the company.
Furthermore, Vance said that Minecraft “offers some perks that go well beyond the raw financials and growing user base. It’s a worldwide phenomenon that really has no rival. Part of the reason kids and adults love the game so much is the free-spirited nature of its Swedish creator Markus Persson. While having Microsoft take over the franchise would ruin the grass-roots feel for some, it would also open up the chance for some deep-pocketed development that could take Minecraft to new heights.”
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