Minecraft: The $2 Billion Video Game
Is the title misleading? Maybe a little. In actuality, Microsoft paid 2.5 billion – with a capital B – to acquire the popular computer game, Minecraft, but that isn’t as catchy so I used the after taxes value of two billion.
It seems amazing that $500 million dollars is considered splitting hairs, but this is reality.
This is what happens when a large corporation like Microsoft sees an iceberg on the horizon.
For the layman, Minecraft is a game based on a block world. Each block is 1x1x1 meter – or a little over a yard – and is programmed to be infinite. When a player walks, sails, flies or teleports, part of a greater world is generated using a mathematical algorithm controlled by a player chosen number.
Now we have an idea of how this blocky world is created, what do people do there and why on earth would Microsoft spend two billion dollars to own it? The reason is rather elusive. Minecraft is a “sandbox game” – meaning there’s no winning or losing. There’s no counter, no clock to beat, and you don’t get to enter your initials when you hit a high score.
During the game’s daytime, players build, farm and gather resources to build a shelter for the purpose of keeping very basic, almost primitive Halloween monsters at bay.
For the past four of the game’s five year old life, enthusiasts have modified parts and pieces to give Minecraft more of a point and/or purpose. Ways for players to acquire and trade items and earn currency lent the game more complexity. More importantly, Minecraft players have bonded together to form a community, and there’s tremendous demand for collaborative play. For many adults, Minecraft is a real time version of Monopoly.
Take each of those transactions and multiply it by hundreds of thousands of items. And it’s a true capitalist society. If Player X figures out a way to streamline the process of creating an item or game widget, he can sell it to Player Y. Player Y can turn around and resell it, but Player X will still sell more in his “store” because he charges less. This is only one iteration of a game created by tech savvy adults “plugged into” Minecraft. And there are thousands of enthusiasts, each producing thousands of potential modifications ranging from ways to process ore – another fundamental aspect of the game – to producing Dorothyesque tornadoes and creating magical worlds complete with wands and potions.
Let’s get back to the math. Take all those “micro-transactions” and multiply it by an ever growing community of truly dedicated players and programmers.18,298,531 people have purchased this game to date. Over 12,000 people bought a copy of Minecraft game in the last 24 hours.
Having said that, the main reason Microsoft was willing to spend over two billion dollars to acquire Minecraft is that the game is written in Java, a programming language Microsoft doesn’t own and the structure of which Microsoft doesn’t resemble. Now look at it from Microsoft’s perspective. If the best and brightest of our children’s parents buy this game for them and they learn how to modify it, you’ve soon got an entire generation hooked on a product Microsoft doesn’t control. It was a crazy little programming festival, if you will, they watched develop and grow in their own backyard.
Minecraft’s owner, in an attempt to avoid litigation from zealous game modifiers now demanding their share of the lucrative pie, decided to sell the company. I assume sharp-mouthed millennial Java programmers were considered a dollar figure by Microsoft’s legal department.
In short, Microsoft realized kids learning the Pepsi of programming at a young age was not good for their Coca-Cola product line, and the way to prevent this looming disaster was to spend the hefty sum of $2.5 billion to acquire Minecraft.
Commentary by Noah Churchel for Pennsylvania Bridges