Microsoft is reportedly planning to purchase Mojang, the Swedish-based independent gaming company responsible for building an empire of its own around the much-loved Minecraft.
Sources cited by the Wall Street Journal, who requested to remain anonymous, said Microsoft is in advanced talks with Mojang to purchase the company and its assets, including the worldwide hit Minecraft, for $2 billion, a fee that is nothing more than a small fraction of the $86 billion the Windows maker has in cash and short-term investments.
If the deal pushes through, Microsoft is said to pay with cash from its overseas operations, which is more favorable to the company than bringing the cash to American soil, where it will have to face huge tax charges. The two companies are expected to reach an agreement by the end of this week, sources told Bloomberg.
A Microsoft acquisition of Mojang comes as a surprise, especially since Mojang founder Markus Persson, better known by his gaming name Notch, is well known for his criticism of large corporations. When Facebook announced that it was going to buy virtual reality startup Oculus VR earlier this year, Persson said he was cancelling a Minecraft version for the upcoming Oculus Rift headset.
"Facebook is not a company of grass-roots tech enthusiasts," he said in a blog post explaining his move. "Facebook is not a game tech company. Facebook has a history of caring about building user numbers, and nothing but building user numbers."
Sources, however, said that Persson initiated the negotiations "a few months ago" after a positive working relationship involving Minecraft for Xbox. Since then, both companies have been working out the terms of the acquisition, which include Persson being hired into Microsoft for the first few months to help with the transition before he leaves. Persson also reportedly has a close relationship with Microsoft's Xbox chief Phil Spencer, said the sources.
Minecraft has become one of the biggest sensations of the gaming world. Although by today's standards the game's boxy graphics seem amateurish, Minecraft has attracted millions of gamers because it lets them build virtually anything they want, with nothing but the extent of their creativity limiting their creations. Last year, Mojang reported a profit of $128 million largely due to Minecraft, not bad for a company that operates with only 40 people on board.
Unlike other gaming companies, which make profits with in-game purchases such as virtual currency and special weapons, Mojang makes money by selling copies of Minecraft. For $7, gamers can play the game on their iOS and Android deviices. The desktop version, which is compatible with both Windows and Mac computers, costs $27. On the other hand, Minecraft for the Xbox and Sony's PlayStation consoles is $20 a pop.
It's unclear why Microsoft would want to purchase Mojang. CEO Satya Nadella has been recently making the push toward open-platform productivity and announced that Xbox isn't considered a core business for Microsoft. However, Nadella did acknowledge that gaming is one of the ways in which the company can expand its foray into the PC and mobile industries.
