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Microsoft Buys Minecraft Developer Mojang for $2.5 Billion

  1. #1


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    Microsoft Buys Minecraft Developer Mojang for $2.5 Billion


    Mojang is the developer of the wildly popular block-based game Minecraft. The game has grown far beyond its modest beginnings, and that has made it a target for acquisition—even Microsoft has been snooping around. The rumors started showing up late last week, but earlier today Mojang announced that Microsoft has indeed purchased the company for a whopping $2.5 billion.
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    A Guy

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  2. #2


    Hafnarfjörður IS
    Posts : 4,376
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    Hi there.

    Before all you Gamers and other "techno wizards" who are in to all this stuff expect Ms to enter the game developers market you should realize the following :

    This is a PURELY TECHNICAL FINANCIAL decision rather than any perceived value of the Game or company itself.

    When you've got a few BILLION dollars of cash to spare putting it in a BANK at 0.25% or LESS interest isn't going to cut it -- the RETURN on the capital on the Game / Company will be MUCH higher than the paltry 0.25% rate of interest the Bank pays. They are looking for around 7.5% which is many times better of course. !!!

    It might feel strange to people who don't "follow" or "play" the markets but the objective here wasn't to gain the money BACK in a mega profit -- there's no way that will happen - especially in any reasonable time frame - but to get a BETTER return on spare cash that Ms has rather than just leave it in the bank at a paltry rate of interest.

    The shareholders also seemed quite impressed - Ms stock has been doing reasonably well of late too.

    "...The wonders of Modern Financial markets ........".

    It's a good move by Ms as well - it gets the ms name into places it wouldn't normally have access to -- remember the old commercials about a certain beer (well rigorous chemical analysis might just about call it "beer" ) from a major Dutch brewing company about the beer reaching parts other ones couldn't.

    I'll expect a lot of mouthings coming from the ignorami about how Ms will never make x billion dollars from this purchase -- well to re-iterate that's NOT the point of the exercise.

    Cheers
    jimbo
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  3. #3


    Well..now!

    This sums it up for me...

    Microsoft didn't just buy Minecraft; it bought a whole boatload of traffic that has fresh monetization potential.
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  4. #4


    Hafnarfjörður IS
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    Linux Centos 7, W8.1, W7, W2K3 Server W10


    Hi there

    The writer of that article hasn't a CLUE obviously about the way "The Money Boys" or Wall St. works. There's no way in THIS universe (or any other ones as well) where that capital is going to grow -- making over 2 billion dollars on this isn't even being THOUGHT about much less planned for.

    However a nice little say up to 10% return on your capital IS a decent earner in todays market -- currently Ms (like Apple) is CASH RICH and big corporations hate sitting on vast piles of cash that doesn't do anything. A 10% return is 40 X BETTER than leaving it in the bank.

    It's like you sitting at home with say 250,000 dollars in the bank - do you say leave it at .25% in the bank (eaten away with inflation too) or perhaps buy a "Buy to Let" piece of real estate - where your rental income is say 5 - 6% per year of your investment.

    Even if the property fails to appreciate in value you are getting the rental income which is far more than just having the money in the bank.

    These other things like introducing new people to the Ms brand isn't really going to work - and there's no way Ms has any interest in developing its own gaming arm. Some of the knowledge will certainly be used in its expanding Robotics area though.

    This as I said is essentially a financial piece of "market Wizardry" -- rather like buying a company or say a Baseball Franchise - with no money down but using the actual assets WITHIN the franchise as collateral to borrow the money to buy the franchise. (Ms hasn't done this but I'm just explaining here another well known "Market technique" of acquiring large assets with little or no money down.

    (I should perhaps do a 101 course on "Hedge Funds" and "Venture Capital" - sometimes known popularly as "Vulture Funds" !! for obvious reasons).

    Cheers
    jimbo
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  5. #5


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    Quote Originally Posted by jimbo45 View Post
    (I should perhaps do a 101 course on "Hedge Funds" and "Venture Capital" - sometimes known popularly as "Vulture Funds" !! for obvious reasons).
    Give a copy to the guys who bought Phones 4U in the UK.
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  6. #6


    Hafnarfjörður IS
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    Linux Centos 7, W8.1, W7, W2K3 Server W10


    Quote Originally Posted by adamf View Post
    Quote Originally Posted by jimbo45 View Post
    (I should perhaps do a 101 course on "Hedge Funds" and "Venture Capital" - sometimes known popularly as "Vulture Funds" !! for obvious reasons).
    Give a copy to the guys who bought Phones 4U in the UK.
    Hi there

    Any business model that relies on 3rd party suppliers providing a service which ANYBODY could see with their eyes CLOSED !! that the 3rd party people were beginning to do themselves CHEAPER was doomed to failure.

    My surprise is that Phones 4U actually lasted so long in the first place -- great idea to start with but as soon as people like Vodafone etc started building their own store chains the writing was on the wall - and obviously the original owner got out at the right time.


    Totally different case to Ms and you can't blame "the Vulture funds" for this - the business model had obviously passed the point at which it was viable. Tough on the 6,000 people or so employed - but that's the nature of private business. No Market - No business.

    Cheers
    jimbo
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  7. #7


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    I agree with you Jimbo and I have no pity for the vultures who bought it. They must have been mad but presumably they did ok.

    What I really don't understand though is minecraft. My son keeps trying to show me the little world he has created and I even occasionally pretend to get excited about running away from Ghosts or Zombies or whatever they are. Or feign enthusiasm at the interior furnishing of his virtual hotel.

    Guess I'm not the target demographic but it seems a rather solitary pursuit.
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  8. #8


    Hafnarfjörður IS
    Posts : 4,376
    Linux Centos 7, W8.1, W7, W2K3 Server W10


    Quote Originally Posted by adamf View Post
    I agree with you Jimbo and I have no pity for the vultures who bought it. They must have been mad but presumably they did ok.

    What I really don't understand though is minecraft. My son keeps trying to show me the little world he has created and I even occasionally pretend to get excited about running away from Ghosts or Zombies or whatever they are. Or feign enthusiasm at the interior furnishing of his virtual hotel.

    Guess I'm not the target demographic but it seems a rather solitary pursuit.
    Hi there.

    Same as me - I can't understand it either -- and also it seems that 99% of games tend to be about DESTROYING / SHOOTING / KILLING things too -- maybe that's why there's so much trouble on the planet -- another issue though.

    Cheers
    jimbo
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Microsoft Buys Minecraft Developer Mojang for $2.5 Billion
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