Microsoft’s acquisition of Minecraft developer Mojang Studios in 2014 may have been one of the company’s best investments in the gaming space. In an era where Microsoft is on the cusp of closing a deal to purchase Activision Blizzard for $69 billion, the $2.5 billion cost to acquire Mojang nearly a decade ago feels like a bargain. Minecraft remains one of the top-selling video game franchises of all time, having sold over 238 million copies, and generates hundreds of millions of dollars in revenue each year.
Under the Xbox division’s management, the franchise has also seen spin-offs like Minecraft Dungeons, Minecraft Legends, and has become an important educational tool to cultivate interest in game development and STEM curriculum in general. Ironically, despite its presence across Xbox consoles, Microsoft recently acknowledged that among consoles, the Nintendo Switch has been the biggest driver of Minecraft sales.
As part of the FTC vs. Microsoft trial to determine the legality of the Activision Blizzard buyout, Xbox CFO Tim Stuart explained that not only has Minecraft been one of the “most profitable, if not the most profitable” first-party games in the Xbox portfolio, but in terms of revenue generation, it’s “roughly twice as big” on PlayStation and “four times as big as Xbox” on the Nintendo Switch.
Microsoft was quick to embrace cross-platform play with Minecraft because it understood how critical the feature would be to sustaining revenue growth. “The strength of a game like Minecraft comes from its cross-platform play. You’d lose a significant revenue stream if you didn’t keep supporting that,” Stuart explained in the trial.
It’s worth noting that a key reason Microsoft is seeking to acquire Activision Blizzard is for King and to bolster the company’s mobile gaming presence. Minecraft is one of Microsoft’s few mobile gaming triumphs. Minecraft’s mobile edition made $161 million in 2021, accounting for 42% of the game’s total revenue at the time.
While Stuart did not compare Minecraft on consoles to the impact of the mobile edition, from a console perspective, the fact that Nintendo Switch has been vitally important squares with data from Interpret’s New Media Measure®, which shows that Minecraft is far more popular among Switch owners than either PlayStation or Xbox owners. About 40% of Switch owners report being a fan of Minecraft compared to 35% of Xbox owners and 31% of PlayStation owners. And while fanship is slightly lower among PlayStation console owners, it’s worth keeping in mind that the PlayStation installed base has been far ahead of the Xbox console installed base for some time, so a smaller slice of a bigger audience will still produce more revenues than the Minecraft fans on Xbox platforms.