Microsoft Expects to Break Even on Mojang Acquisition This Fiscal Year - News
by William D'Angelo , posted on 15 September 2014 / 5,766 Views
It was announced today that Microsoft was acquiring Minecraft developer Mojang for $2.5 billion. That makes it the biggest acquisition in gaming this year. Despite the enormous price tag Microsoft is expecting to break even on the deal this fiscal year on a GAAP basis.
"Gaming is a top activity spanning devices, from PCs and consoles to tablets and mobile, with billions of hours spent each year," said Microsoft CEO Satya Nadella. "Minecraft is more than a great game franchise - it is an open world platform, driven by a vibrant community we care deeply about, and rich with new opportunities for that community and for Microsoft."
"The Minecraft players have taken the game and turned it into something that surpassed all of our expectations. The acquisition by Microsoft brings a new chapter to the incredible story of Minecraft," said Carl Manneh, CEO, Mojang. "As the founders move on to start new projects, we believe the high level of creativity from the community will continue the game’s success far into the future."
Minecraft is one of the biggest games in video game history with sales topping 50 million units across all platforms.
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A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. Outside, in the real world, he has a passion for the outdoors which includes everything from hiking to having received his B.A. in Environmental Studies. You can contact the author at wdangelo@vgchartz.com or on Twitter @TrunksWD.
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The Vita port is going to cover that $2.5 billion.
:D so the RRP per copy will be around 250million ye?
Every Vita owner is going to buy 100 copies.
I just don't see how they can make this back up without introducing a ton of mictransactions to the game or forcing everyone to rebuy the game by introducing a "sequel."
They would haven't to sell it at $16 and move 154,200,000 to break even.
or staff charges? lighting, premises and electricity for it's server centers? or the costs envolved in the physical copies of the game on the consoles? shipping, handling, advertising space in shops? or even sales TAX on each 16dollars?
The only way someone can sell something for 16dollars each and make a 16 dollars profit per item is if they've stolen the item and if they're selling it illegally.
To clarify, this is an asset purchase. It will be depreciated over its useful life. Considering a majority of the purchase is just goodwill, the overall depreciation on the assets themselves will be extremely minimal. The remaining goodwill only goes to the income statement if an impairment test determines the underlying asset has lost some of its value.
To put it simply, I wouldn't be surprised if $100 million in revenue would result in a breakeven on a GAAP basis.
How are they going to break even??? Unless they jack the price and do microtransactrion after microtransaction.... I am beginning to worry about the PC version now...
Honestly, I believe this is a statement so shareholders don't lose it. I don't believe Microsoft will "break even" in this fiscal year. Are they coo coo?
hahahahahahahahahahahahahahahahhahahah
I'll take the wait and see approach with this news.
Idiots. You can expect the game to make that much money this later in the fiscal year.
Here http://www.microsoft.com/en-us/news/press/2014/sept14/09-15news.aspx (from Microsoft site) it indicates for FY15, why on Vg chartz it's this fiscal year?
Mojang must have a lot more in the bank than we realize. If MS expect $300 million in profit from Minecraft and Mojang has just under 2 billion in the the bank already, then this works out ok.
