Didn't the big surge in recent sales mainly come from kids?
Rumour confirmed: Microsoft Purchase Minecraft for $2.5B (Post#122)
- Thread starter Rangers
- Start date
Didn't the big surge in recent sales mainly come from kids?
They made 120 million last year (profits from about twice that revenues), which was about double the previous year. So a few hundreds of millions all told.
Michellstar
Regular
It´s for the same reason FB bought whatsapp for an insane amount of money, Ms would hope to get millions of user accounts to their ecosystem....
It´s not about gaming
It´s not about gaming
Really? GTA, COD:MW, WoW, Lineage ... or something more within Minecraft's current demographic Skylanders. There are many IPs with proven track records of generating either repeatable profits on the scale of Minecraft across a game series or steady profits through subscription.
If Mojang successfully launches Minecraft 2 and manages to transition most of the community then it will be a good IP ... but I have my doubts. Trying to shoehorn the game into a mod/PC hostile sequel would make it even less likely.
Sigfried1977
Legend
2 billion is just nuts. Especially for an IP that was never about the next, big installment than it is about gradual evolution. To my limted knowledge it also hasn't generated anywhere near that amount of money so far, and that's even though it's been available for just about every platfrom imaginable for ages. Good on Persson for making an absolute killing off of one company handing out money head over fist in desperation I suppose. Cannot blame the guy really. For 2 billion I'd gladly swallow accusations of hypocrisy too.
"Super Minecraft" seems like a much better name for a sequel than "Minecraft 2"
Concerning the price; It could very well be a good long term investment.
It will need to stay multiplatform(mobile/console/pc), then they can branch off into other fields such as merchandise, creep in a little micro-transactions and drop the entry price to like $5.
Concerning the price; It could very well be a good long term investment.
It will need to stay multiplatform(mobile/console/pc), then they can branch off into other fields such as merchandise, creep in a little micro-transactions and drop the entry price to like $5.
Snapchat is worth $10 billion and it doesn't generate any revenue.
http://www.forbes.com/sites/alexkonrad/2014/09/09/snapchat-settles-cofounder-lawsuit/
I will never understand how it is determined what a company is worth. Buying Minecraft for $2 billion seems like a terrible idea.
http://www.forbes.com/sites/alexkonrad/2014/09/09/snapchat-settles-cofounder-lawsuit/
I will never understand how it is determined what a company is worth. Buying Minecraft for $2 billion seems like a terrible idea.
Honestly, I don't think you could even swing a franchise purchase of GTA, COD or WOW for 2 billion dollars.
Mojang has gotten MC to 330 million in annual revenue without even trying hard. They have 4 people who work on the PC version and 2 for iOS. They sell 10k of MC a day on the PC without Steam. They literally get every last cent of the PC retail price of MC.
The potential with MC is that is more like a film from Marvel which can be sold to all age range and hit various non gaming market (plushies like someone else mentioned). While GTA, COD and WOW are more like very popular R-rated titles. They may be highly lucrative but you aren't going sell toys of Franklin, Michael and Trevor to a bunch of preteens.
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http://video.cnbc.com/gallery/?video=3000309447
They claim the 2B is nothing to them, and that deal would makes the division big enough to make a spinoff. So they spend overseas money to raise the ebitda of that division, and at the same time it raises profits by 120M/year, making the division sustainable on it's own? I don't understand how this adds up to making the 2B worth it, unless the overseas money can't be brought inland for tax reasons, and that would be a way to spend it?
Is that a tax thing?
They claim the 2B is nothing to them, and that deal would makes the division big enough to make a spinoff. So they spend overseas money to raise the ebitda of that division, and at the same time it raises profits by 120M/year, making the division sustainable on it's own? I don't understand how this adds up to making the 2B worth it, unless the overseas money can't be brought inland for tax reasons, and that would be a way to spend it?
If you judged Mojang like any other public company, you can easily see where the 2 billion justification comes from.
Apple makes $40 billion a year in profits. Its market cap is ~$600 billion. But once you account for the float, unrestricted shares and the premium that shareholders would demand, Apple if sold might be worth in neighborhood of ~800 billion to 1 trillion dollars. Hardly justified by annual profits alone.
The value of Mojang or MC doesn't go to zero once purchased. MS could easily buy it for 2 billion, push profit to $200-300 annually and in five years sell it for twice as much. MS would see a return of 225% not 25% loss.
Ultimately the worthiness of the deal is dependent on MS's ability to turn it into a profitable property. However, given MS recent track history with buying companies outside their primary expertise, there is a question if they can.
Apple makes $40 billion a year in profits. Its market cap is ~$600 billion. But once you account for the float, unrestricted shares and the premium that shareholders would demand, Apple if sold might be worth in neighborhood of ~800 billion to 1 trillion dollars. Hardly justified by annual profits alone.
The value of Mojang or MC doesn't go to zero once purchased. MS could easily buy it for 2 billion, push profit to $200-300 annually and in five years sell it for twice as much. MS would see a return of 225% not 25% loss.
Ultimately the worthiness of the deal is dependent on MS's ability to turn it into a profitable property. However, given MS recent track history with buying companies outside their primary expertise, there is a question if they can.
That's a very likely explanation. Still, I wonder if with that money it wouldn't be better to try buying a company like Blizzard, whose games are pure and sheer addiction of the most awesome kind. Not doable, I think, but well...
They are probably looking ahead, in the future, rather than pleasing the current generation of gamers with other decisions -perhaps Sega or Capcom could be purchased with that money, for instance-.
A PC crowd who will react very hostile if there is no PC version ... even if there is, if the programmers don't get the DRM right it might get modded on the PC to turn the XBOX/WinRT/Lumia into the inferior platforms.
PS. I guess with microsoft run servers they don't have to worry too much about the DRM ... the older crowd won't really appreciate the loss of personal servers either, but they can get over that.
Yes, afaik it's widely known that US companies can avoid paying tax in the US as long as the money stays out of the US. They only have to pay once they bring it into the company. Which is pretty bad, considering the amount of money that evades the treasury like that could have helped the US with a lot of other useful things, like reduce the huge debt.
That's a very good point, treating it as an investment that can be sold on. However, do developers trade hands? Not AFAIK. Rare and ND aren't bought and sold between platform holders. Also, Apple comes with a whole load of people and physical premises and capital which makes up part of their value. Not only is it worth the annual profits, but also its accumulated wealth in resources and talent. Mojang is a two-bit operation with an office and a dozen employees as I understand it. Materially it's only worth Minecraft, plus maybe whatever Scrolls is. So it seems to me the only value from Minecraft is its revenue generating brand and product. The Goodwill value will also be significant.
COD: we got some numbers recently european wide first half sales
2011 1674k
2012 1482k
2013 1413k
2014 1367k
I mentioned this before, COD is getting less and less relevant, sure its still a giant IP
WOW: http://www.gamasutra.com/view/news/197085/World_of_Warcraft_continues_to_hemorrhage_players.php
lineage: couldnt really find any hard data, 14 million users, but I think thats total ever, no idea if its growing or fading
I believe the difference between the IP's you listed(*) and mincraft/GTA is they're in decline and minecraft/GTA/FiFA are on the UP. I know which way I'ld want an IP that I was purchasing to be going
(*)also madden,just dance,guitar hero etc
No, game franchises aren't traded and sold like baseball cards. But just because you buy an auto and plan on being its first and only owner until it makes its way to the junkyard, doesn't mean you should prescribe a zero value on its day of purchase. Your unlikeliness to sell doesn't mean future value trumphs current value.
There is a reason why game franchises aren't sold and swap on a continual and wide basis. Highly popular franchises can remain valuable for decades. This is not true in the mobile space where its more about the commoditization of gaming. That space seems more interested in creating addictive game mechanics and continually redressing them as new titles versus creating strong unique brands that have long lasting value. But in the console and PC space the opposite is more true.
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