While it may seem an odd move by Microsoft Corporation (NASDAQ MSFT) Chief Executive Officer Satya Nadella, a rumored deal that the tech giant is trying to buy the company that makes the popular “Minecraft” game could deliver some benefits for Microsoft stock.
Wall Street was indifferent to the deal, with MSFT stock mostly flat since. Reports in The Wall Street Journal and The New York Times said that Microsoft is making a deal in which it would pay $2 billion for Mojang, the Swedish company that created “Minecraft.”
It is the first major deal initiated by Nadella since he took the CEO post, and it’s one few would have predicted. In his first six months, Nadella has said cloud computing would be Microsoft’s primary focus.
And despite the success of the Xbox, Nadella said in a memo earlier this year that it was not a “core business” for the Redmond, Wash.-based company. Even if Microsoft had expressed interest in expanding its gaming footprint, Mojang is not the first name that would spring to mind.
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According to The Journal, Mojang made a profit of $115 million last year on $291 million in revenue, so it’s a relatively small operation. The founder and majority owner, Markus Persson (known online simply as “Notch”) is known for his disdain of large tech companies.
The company was formed primarily to manage the unlikely success of “Minecraft,” which is an online world in which players create characters that have the freedom to build pretty much anything they can imagine using blocky, 1980s-style graphics while evading monsters such as “creepers” that can sneak up and kill you.
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“Minecraft” has legions of school-age fans, so any software built on the “Minecraft” platform would have a built-in customer base. Mojang could also help Microsoft make up for lost ground in the mobile app space, where Apple Inc App Store and Google Inc’s (NASDAQ GOOG) Google Play store dominate.
“Minecraft” is available across many platforms, from PCs and Macs to smartphones and tablets. But like many popular apps, it’s not available for Windows Phone. Microsoft knows that it can’t compete with Apple and Google’s platforms unless it can build a robust ecosystem.
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