Better Than Wolves Forum

There's also the merchendising revenue. Lotta kids buying creeper hats out there

Guilty. I need to get around to making some BTW shirts.

If Microsoft know what they're doing, they'll leave Minecraft to the guys at Mojang. They've purchased a huge player base of kids around 10 yrs old that'll be buying Xbox ones in the next couple of years, not just a game. Fucking it up will just deter future customers

ylogaj wrote:Guilty. I need to get around to making some BTW shirts.

and Hat hats.

Husbag3 wrote:If Microsoft know what they're doing, they'll leave Minecraft to the guys at Mojang.

Not sure if I agree. Also, it's pretty much confirmed that's not going to happen:



Possible idea: finally get the Minecraft MMO thing on the road properly. If MS has a game-plan for properly introducing massive servers, they could easily gain a decent revenue out of that.

Gilberreke wrote:Also, it's pretty much confirmed that's not going to happen:

While what he's saying in that snippet sounds credible, I really don't think "some guy on the internet that says he has a friend" confirms anything...even "pretty much" ;)

I'd also like to add that having a friend give you inside info like that, then posting it on the net would be pretty low. If it were true, there's probably enough info there to figure out who the employee in question is and fire him for violating his NDA.

If Microsoft knows what they're doing, they'll give Jeb and the rest a nice retirement package and hand the Minecraft label to a studio with a good designer and experienced game developers

EtherealWrath wrote: and Hat hats.

Working on one, actually

I definitely think we'll be hearing about Minecraft 2 soon. It wouldn't surprise me in the slightest if they bought Minecraft for its clout- they've probably been developing a voxel game for who knows how long now? It wouldn't surprise me if they did it to simply to get the title slapped on there. I personally would be somewhat more interested in that, since Minecraft has been quickly going nowhere for a long time.

Also, just a heads up about Let's Plays: Microsoft technically has a no-monetize rule for their stuff. That includes ad revenue. They haven't cracked down on it to the best of my knowledge but with the amount of ad revenue behind it, I would not be surprised. Even if it IS Microsoft, who have more money than I can comprehend. I wouldn't be surprised if we get a shit-storm of copyright strikes here soon.

DaveYanakov wrote:If Microsoft knows what they're doing, they'll give Jeb and the rest a nice retirement package and hand the Minecraft label to a studio with a good designer and experienced game developers

Jeb is leaving with Notch, as is Carl Manneh. Given that, afaik, Jeb (used to) own 1/5th of Mojang, that skinny dude is also set for life... Carl Manneh also had about 8% of shares, so even he will be leaving with 200 nice houses worth of moneyz

DerAlex wrote:Jeb is leaving with Notch, as is Carl Manneh. Given that, afaik, Jeb (used to) own 1/5th of Mojang, that skinny dude is also set for life... Carl Manneh also had about 8% of shares, so even he will be leaving with 200 nice houses worth of moneyz

It's not Jeb, Jeb is staying on as lead of Minecraft. Jakob, one of the founders is the one that is leaving along side of Notch and Carl.

Wow. Really? For the last 4 years, those two, appartently different, people where only one person "in my head".

Lol... Sorry for the misinformation, honest mistake... Poor Jeb then...

http://www.engadget.com/2014/09/19/micr ... planation/

The key thing to take away here is that microsoft expects to make $25 million by June 30, 2015. Not that difficult. I suspect Notch was looking to get out and just called up the guys that handled the xbox 360 port of minecraft and said he wanted out.

edit:

Another key thing to take away here is that minecraft is now owned by a company that has so much money, that they can lose money and still make money.

Yeah...I don't know man. That "only 25 million" logic works under the assumption that your original invested capital isn't going to start disappearing over the 100 or so years it would take you to recoup your investment :)

It basically assumes that at any point you could just sell Mojang to someone else to get your 2.5bil back and do something else with it. Obviously...that likely won't happen.

Also, 25 million is only 1% on 2.5 billion. I somehow doubt that's what Microsoft considers to be a reasonable return on investment, even if they just left the money sitting in the bank for 2/3 of a year.

Dunno. That article seems rather fishy to me.

the way i see it, it's more about buying the IP than any software. they want the community base. i expect this purchase is more about minecraft2, which won't be a java game. and i also expect minecraft2 will make well more than $2.5b. if it doesn't, you can be sure that by minecraft7 they will finally reach that target. minecraft has become like lego, or playdoh, or kinder surprise. almost every kid goes through a phase of wanting each of them. now microsoft own that phase. let's hope they do good with it.

The main reason I believe the $25 million hypothesis is because microsoft would have to launch Minecraft 2 and bundle it with the Xbone and sell over 4.1 million units at around $600 to get $2.5 billion back. I don't see that happening in 6 months. I am willing to eat my words if I'm wrong though.

But seriously, not even minecraft 2 can sell that many xboxes in a year.

Jesar wrote:The main reason I believe the $25 million hypothesis is because microsoft would have to launch Minecraft 2 and bundle it with the Xbone and sell over 4.1 million units at around $600 to get $2.5 billion back. I don't see that happening in 6 months. I am willing to eat my words if I'm wrong though.

But seriously, not even minecraft 2 can sell that many xboxes in a year.

While I agree that Microsoft doesn't need to make back the entire 2.5 billion in a year, 25 million seems like a crazily low number. I cannot imagine anyone at Microsoft thinking a 1% annual return on investment is a reasonable deal for anything. That's not much better than outright losing money, considering all the other ways they could make a higher steady profit on 2.5 billion.

The article is probably right, their math: completely wrong. Let's do some simple book keeping:

Amount of money that Mojang has to make them each year, in profit:
Average bank interests for $2.5B: $25M (this is probably about right)
Yearly depreciation of the purchased property: ?

To break even, the property has to have a yearly profit of those two figures combined. The big question is: what is Microsoft's estimated yearly depreciation and what does that depend on?

If they just keep selling MC and MC merchandising, do nothing else with the IP (considering that Mojang = MC + pocket money), and follow the sales trend of MC, a fair longevity number would be, say, 10 years (that's a lot for a gaming IP, but MC is weird). That means that the property will be worth $0 in 10 years. This is probably not true, but in accounting, especially IT, that's a long time, so the number seems about fair to me. This is about ball-parking correctly, we don't have access to the actual numbers MS calculated.

Yearly depreciation: $250 million
Yearly expected revenue to break even: $275 million
(this is downwards trending, so for this year, the number would be way higher)

Of course, no one said that they will recoup $2.5B in a year, but $275M is certainly more than MC will earn them by June. Mojang made $130 million in 2013 it seems and $50 the year before. This means one of three things: MS expects MC to at least quintuple profits ($650 million in profit or more) this year, which is impossible. OR, they expect to grow the franchise in a way that they can project the IP to last decades upon decades (this doesn't seems sane). OR, both of those.

Both makes sense. If they assume they can drastically increase profits (which is possible, with marketing, merchandising, etc) and are able to successfully launch a plan that increases the longevity of the MC IP (say, MC2 or MC MMO, to name the most popular guesses), the yearly expected revenue probably goes down to, say, $100 million, meaning they have to make something like $350 million by June. That seems steep, but do-able. We're talking about doubling profit, something MS has done time and time again.

I pulled most of these numbers out of my ass, but I tried to stick to a general order of magnitude that makes sense. All that MS is saying is: "we have a long-term plan for MC that promises rapid growth this year and sets up the IP for a long life-cycle". Doing some quick order of magnitude number crushing supports the idea that this is in the realm of the possible. Further than that, this post is just fairy land talk where a dozen million more or less don't matter.

My fairy post is a little less fantasy than a news post claiming that Microsoft is saying to their investors that a company that made $130 million last year is going to earn no more than $30 million this year though. So, no, Jesar, don't believe articles that say Microsoft bought Mojang and now expects the company's profits to go down to peanuts, which almost equals a ROI of minus bankruptcy.

Gilberreke wrote: Average bank interests for $2.5B: $25M (this is probably about right)

I could be wrong here man, as interest rates are way lower now than what I grew up on, but doesn't 1% bank interest for a beyond-premium customer like Microsoft sound ridiculously low?

FlowerChild wrote:I could be wrong here man, as interest rates are way lower now than what I grew up on, but doesn't 1% bank interest for a beyond-premium customer like Microsoft sound ridiculously low?

Yep, seems really low. I'm trying to ball-park a better number for the $25 million bit. I'm not expecting a number a magnitude higher, so it shouldn't affect the fairy dust of my post much, but to be safe, I'll try to find some numbers for you. Mind you, I'm only a basic-level accountant (probably the only useful part of my BA), with not a lot of experience crunching numbers for franchises and such, so I might be completely off the mark anyway. Just saying that some wiggling will net you realistic numbers all of a sudden and that's exactly what MS did.

Quick ball-park after look at the MSFT annual reports tell me that the $25 million number is probably way higher, but I'm not sure how much. Looks to me like Microsoft is generally getting 10% interest rates rather than 1%. This about what you report though, so the number will be lower. A sane number seems to be between 4% and 6%, meaning that $25 million a year suddenly turns into $100M or $150M. With a 5% interest rate, the money will make MS as much in the bank as it will make them by buying Mojang, without even considering Minecraft losing value over time (AKA utter insanity).

What this means for the above post is that MS needs a very, very aggressive approach on how to handle the MC IP. Nothing new there. I do believe the numbers seem do-able. The best metric for all of this is to look at what the shareholders think. There was definitely a dip in the stock value after the news, so you can be sure it's not going to be "a doozy", like some people say. It's also not impossible, like many more say. You'll just see some very aggressive tactics from MS, meaning I wouldn't want to be Mojang.

Microsoft is apparently a very nice company to work for, if they keep you on, but they generally handle their acquisitions with absolute aggression. I expect nothing less from this acquisition.

Having been through an MS acquisition in the past, "aggressive" doesn't even begin to cover it...

I would also throw in "surreal", "Orwellian", and "AAAAAAAHHHH!!!!" :)

As for them being a nice company to work for, I would beg to differ, but I also got the fuck out of Dodge on principle as quickly as possible after that, so experience may vary. It really depends who you talk to though as some people willingly accept the chip implants and adopt a "We are owned by Microsoft. We have always been owned by Microsoft" mindset very quickly.

As I said previously, I don't much care for Microsoft ;)

FlowerChild wrote:As I said previously, I don't much care for Microsoft ;)

I remember, didn't want to bring it up, because of bad memories :)

I personally just love all of the open-source stuff Microsoft puts out, which says nothing. That's like saying Mussollini was a nice guy because you like all the crazy hats he wore.

Gilberreke wrote:That's like saying Mussollini was a nice guy because you like all the crazy hats he wore.

They were indeed glorious hats, and Stalin had a magnificent mustache :)

I'm not an anti-MS fanatic by a long shot. I still use their products on a regular basis. However, working for them was just beyond what I was willing to swallow, but that would be true of any of the gaming mega-corps like Ubisoft or EA for that matter. Maybe a bit more so for MS given they have their hands in so many pies and are rather notorious for their cutthroat and monopolistic business practices, but comparable.

Not to mention the MS indoctrination seminar complete with a film of Bill Gates hanging out with various celebrities to try and convince you of what a cool guy he really is gave me the willies :)

I still fondly remember a time where the game industry was dominated by small studios comprised of brilliant and eccentric individuals. In some ways, Mojang, and the whole indie game movement originally represented somewhat of a return to those days for me. I guess MS buying them is a particularly bitter pill to swallow, especially given how Notch seemed to be the last person that would sell out that way, but such is life.

Guys. What if Microsoft buying Mojang has to do with phones?

I mean, Windows Phone is practically ignored by the masses; maybe they bought Mojang to port Minecraft to their phone OS, as a way to boost its market share...

chaoticneutral wrote:Guys. What if Microsoft buying Mojang has to do with phones?

I mean, Windows Phone is practically ignored by the masses; maybe they bought Mojang to port Minecraft to their phone OS, as a way to boost its market share...

Well that's certainly a part of it. I already saw something talking about a windows phone port that's going to be coming, but I don't think that alone would explain it, though.