What Is Minecraft, and Why Did Microsoft Just Pay $2.5 Billion for It?

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Microsoft announced today that it is buying Mojang, a Swedish game company that is responsible for the megahit Minecraft, for $2.5 billion. It’s the most significant acquisition for Microsoft since it bought Nokia last year, and one of the biggest developments of the year in the gaming world.

If you’re like me (childless, born in the 1980s, casual gamer), the odds are good that Minecraft is a mystery to you. What is this game? And why did Microsoft deem it worthy of a giant pile of money? Here, fellow olds, this should help:

What is Minecraft?
It’s an open-ended, exploration-based video game created in 2009 by Swedish game developer Markus “Notch” Persson. Players begin in an empty, barren world, and have to gather and mine various materials, while gathering food and fending off attacks from monsters, to survive. There’s no instruction manual to follow, and no explicit goals to achieve. It’s what gamers call a “sandbox game,” one that lets players modify the world around them in nearly infinite ways.

So it’s like the Sims?
Sort of, but it has much more in common with LEGO. Minecraft is a platform for creative expression that allows players to do almost anything, including “modding” the game itself and creating vast environments that resemble real-world places or fictional worlds. (Like these two guys who used Minecraft to re-create George R.R. Martin’s Westeros brick-by-brick.) It’s also much more prosaic-looking than the Sims — with simple, blocky graphics straight out of the Super NES days.

How did a blocky-looking, directionless video game become huge?
Persson uploaded a half-finished demo of Minecraft to YouTube in 2009, then released a playable version on the independent gaming forum TIGSource later that year. In a move that surprised many gamers, Persson decided to charge for Minecraft even in its early versions — $13 per copy. After the game started to take off, Persson quit his day job to focus on Minecraft full-time. By the time it had officially launched in 2011, it was a bona fide smash, selling a million copies within its first month in wide release. Persson did no advertising except for word of mouth, and, eventually, he had the biggest game in the world.

Today, more than 54 million people have bought Minecraft. There are Minecraft conferences called MineCon, and Minecraft is routinely the No. 1 app in both the Apple and Google Play app stores. It has also spawned a huge and active community, which itself is part of the attraction. As Robin Sloan wrote on Medium, “The true Minecraft is the game plus the sprawling network of tutorials, wikis, galleries, videos.”

Who plays Minecraft?
That’s the interesting part — it’s not whom you’d expect. As the Times says, Minecraft “has succeeded partly by demolishing generational and gender boundaries that usually carve the games business into separate categories.” It’s hugely popular within the male gamer community, but girls play, too. Young children play Minecraft, and their parents play alongside them. No video game is for everyone, but Minecraft seems to be the freakishly rare exception.

Kids play this thing? I thought parents hated video games.
Not Minecraft. In fact, after I asked about Minecraft on Twitter the other day, I got several responses from parents who swore it was a godsend for their kids. Unlike most video games, Minecraft isn’t violent or gory, and it’s based on creativity and problem-solving. It’s not an educational game, per se, but it seems to be teaching kids lots of real-world skills, and parents are grateful.

Okay, so this thing is popular. But why is it worth $2.5 billion?
Because it makes money. Thanks to its old-school strategy of actually requiring people to buy a game before playing it (instead of using in-app purchases, for example), last year, Mojang made $126 million in profits on $289 million in revenue. That’s a lot for a studio that has only 28 employees. And combined with the tech world’s obsession with youth, it’s a surprise Microsoft didn’t pay more than $2.5 billion for it.

How do Minecraft fans feel about the acquisition?
They’re skeptical, to put it mildly. After news of the deal leaked, angry Minecraft fans voiced their frustration on Reddit and other forums, accusing Persson of being a sellout and worrying that a Microsoft-led Minecraft would be ruined. “To them the idea of an independent company getting acquired by a larger corporation is just foreign,” Tommy Carpenter, the lead editor of Minecraft Forum, told The Wall Street Journal. “They don’t understand what would cause that to happen.”

Mojang is trying to reassure longtime Minecraft fans. In a post announcing the acquisition today, the company wrote: “Change is scary, and this is a big change for all of us. It’s going to be good though. Everything is going to be OK. .”

What’s happening to Minecraft’s inventor now?
He and his two co-founders are leaving Mojang. In a blog post today, Persson explained his decision to ditch the company he started and go back to developing other games:

Thank you for turning Minecraft into what it has become, but there are too many of you, and I can’t be responsible for something this big. In one sense, it belongs to Microsoft now. In a much bigger sense, it’s belonged to all of you for a long time, and that will never change.

It’s not about the money. It’s about my sanity.

That said, “it’s not about the money” is a pretty easy thing to say, when you’ve just sold your company for $2.5 billion.

Has Minecraft’s founder ever made any disparaging statements about Microsoft that are now coming back to embarrass him?
Funny you should ask! In the past, Persson has not been a Microsoft fan at all, and has been tweeting digs like this for years:

Those acquisition talks must have been a little awkward.

I get why Minecraft is worth a lot of money now. But won’t people eventually get sick of playing it, like the Sims, Angry Birds, Candy Crush, and every other game out there?
It’s certainly possible. TechCrunch writes that “the way no one saw Minecraft coming, we probably won’t see the game that usurps it coming, either.” And Persson once called the game’s success a “freak thing” that could never be replicated intentionally.

But Minecraft isn’t like most games. It gets better over time, thanks to all the amazing things players are building inside it. And it’s not likely to be eclipsed by better-looking games, since slick graphics have never been part of its appeal. Even if Microsoft never manages to create a sequel to Minecraft with as much appeal as the original, we could still be looking at several more years of profitable, obsessive play.

Why Microsoft Paid $2.5 Billion for Minecraft