Minecraft: Microsoft’s Best Ever Acquisition?

minecraft logoConfession time: I’m one of the few people on the planet who hasn’t played Minecraft yet. But researching the digital Lego phenomenon for an upcoming feature yielded some interesting analyst insights I thought I’d share.

Minecraft hit 100 million users recently – not bad for a title many thought Microsoft was a little ill-advised to pay $2.5bn for two years ago.

For IDC gaming research director, Lewis Ward, the purchase was made with one eye on showing off the Windows 10 OS – then in development.

“The ulterior motive was the idea of Windows 10-based Universal Apps, and this idea of Xbox Play Anywhere (XPA) games on Windows 10,” he told me. “Minecraft is a living example of how Microsoft’s new OS can support apps with the same codebase that works on multiple terminals, including PCs, game consoles and mobile devices. So it’s become Microsoft’s poster child in gaming for these types of apps and I think that was a big part of what led Microsoft to buy the company.”

There’s also plenty of debate at the moment about the future of Minecraft. Redmond recently signed a deal with Netease to license its mobile and PC versions, which could increase the game’s user base exponentially. There are also major opportunities in the AR and VR space. The synergies with Microsoft’s HoloLens AR platform and its ambitions in the education sector are obvious, according to Ward.

“If Lego helped me learn as a kid how to build stuff with others while having fun and being creative, and I remember playing with Lego all the time in first grade and crying when my parents forced me to sell my big bag of Lego around fourth grade, then Minecraft is the modern day equivalent and has a place in early education,” he argued.

“It’s a very accessible game and one that stresses the positive things in life; one that has truly universal appeal. I’m sure there are lots of great minds up in Redmond thinking about how the franchise can be used in certain vertical markets and business-centric scenarios.”

Microsoft released an Education Edition of the game earlier this year – a statement of intent if ever there was one. Minecrafters will be watching eagerly to see what it’s next play will be.

 

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What to Expect from Giants of Console Gaming in 2015

gamer logoI’ve just finished a feature on the console gaming market which was just about as far out of my comfort zone as you can get.

Still, it’s always good learning about new areas of technology, so here’s what I have surmised over the past few days:

  • Sony and Microsoft rule the roost. Nintendo will never gain parity as long as its selection of third party titles is so poor.
  • Sony’s PS4 won 2014, but Xbox One hit back in the last two months of the year thanks to discounted pricing
  • Both of the big boys have copied each other’s strategy at times; in engaging with the gamer geek and “bedroom coder” community and in trying to tie up exclusive third party title deals.
  • There’s pretty much nothing to separate the two hardware wise, which is why there’ll be some increasingly aggressive deal-making going on with third party developers in the coming years.
  • As IDC Retail Insights head of Europe, Spencer Izard, told me, there are only two things gamers really care about: “how many of your friends are using my console and am I getting the best content.”
  • The future will eventually shift towards online downloads, although not until there’s a critical mass of users. Only then will the console giants feel they can take retailers on and undercut them on price with downloads.
  • In developing regions this shift will take far longer, as broadband infrastructure simply isn’t up to the hefty downloads necessary.
  • However, last year actually saw “a significant increase” in spending on digital transactions for games, according to IHS head of games, Piers Harding-Rolls. “Part of this is to do with the early adopters who are currently very active digitally on the latest consoles, part of this is to do with the day and date release of new releases alongside boxed product in the retail channels and part of it is to do with the ability to use more efficient monetisation models in the digital space,” he told me. “In this context we have seen more open ended spending opportunities emerge on consoles during the last few years driving up monetisation.”
  • The rise of smartphone and tablet-based gaming represents a real challenge to the console players
  • In China, like Korea, Sony and Microsoft have just been too late to make a difference. The market is either swamped with pirated clones or dominated by PC gaming. Regulators will also be hard to please in terms of software content.

And there you have it. All you need to know about console-based gaming in a few media friendly sound bites.