It looks like Minecraft has not just been a huge hit for Microsoft. It may have also been one of the main reasons Xbox could keep funding many of its other games and studios. According to Bloomberg, Microsoft has been using the massive profits made by Minecraft to support the rest of its Xbox gaming portfolio for years.
Even though Mojang worked more or less on its own, Minecraft’s profits helped Xbox fund other games, studios, and projects. That is a huge deal when you remember how big Minecraft is. It is the best-selling video game ever, with more than 400 million copies sold. But this also came with a problem. Because so much of Minecraft’s money was being used elsewhere, current Xbox management now believes the franchise was badly underfunded. In simple words, Minecraft was making a lot of money, but not enough of that money was being invested back into Minecraft itself.
The report reads, “Profits from Minecraft, considered one of the most successful video games in the world, were used to fund the rest of the gaming portfolio, according to the person familiar with Xbox operations.”
At the same time, Microsoft was spending huge amounts of money on major gaming deals. Over the last decade, the company spent nearly $80 billion on big purchases, including $7.5 billion for ZeniMax Media and $69 billion for Activision Blizzard. New Xbox CEO Asha Sharma also said in an email that Microsoft’s push into smaller independent studios was very unprofitable. In a typical year, Xbox was losing 64 cents for every dollar it invested in that area.
This makes Sharma’s latest choices much easier to understand. As part of Xbox’s reorganization, she decided to take direct control of Mojang and King, the creators of Candy Crush, another very profitable franchise. From now on, those teams will have to report their decisions directly to the CEO. As more information becomes available, we’ll make sure to let you guys know here at GameObserver.
