Get Ready for Microsoft to Rev Up the Global Minecraft Machine

Can a kids' game turn the ailing tech giant around?

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By Ryan Holmes

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I recently took a family vacation with my 10-year-old nephew. He couldn't stop talking about one thing: Minecraft. If you're not among the more than 100 million people around the globe who have registered to play, Minecraft is a virtual world where users build things out of cubes. (It has a surprisingly retro, low-tech feel.) You "mine" resources - ores, stone, wood and so on - and "craft" things out of them, from basic tools like axes and shovels to elaborate palaces and just about anything you can think up.

Last September, in a move little noticed outside the gaming world, Microsoft bought Minecraft for $2.5 billion. With its legendary $85 billion war chest, this was hardly a splurge for the company. But it may well prove one of its more savvy purchases, while also hinting at something far bigger: the quiet resurgence of a tech giant thought to have lost its way.

So how big is Minecraft? According to my nephew, half of his school is playing it. But maybe some other data points would be helpful. Since it was launched in 2009 by a little-known Swedish programmer, at least 50 million copies of the game have been sold. (Users can also play trial versions for free.). It's available for PC (its original format), as well as on the Xbox and PlayStation consoles and in a smartphone friendly "pocket" edition. A continually updated ticker on the official website showed that 13,163 people purchased the PC game over a recent 24-hour span: at $26.95 a pop, that works out to around $350,000 in sales per day or roughly $129 million per year.

Related: Here's How One Tweet Led to Microsoft Buying Minecraft for $2.5 Billion

But it's important to point out that Minecraft is a cultural phenomenon that transcends the screen - much like Super Mario Bros. was a generation or two back. Talk to a parent and chances are he or she has either thrown or attended a Minecraft-themed birthday party lately. Kids spend weeks building virtual castles and whole cities block by block and beg to attend Minecraft-themed summer camps. Masks and T-shirts showing the game's pixelated Everyman protagonist Steve or his nemesis the evil creepers are hot sellers in gift shops the world over. There are best-selling Minecraft books from Scholastic, wildly popular Lego sets and rumors of an upcoming feature film from Warner Bros. Meanwhile, the most recent Minecraft user conference, MineCon, sold 2,500 tickets in three seconds.

A large part of Minecraft's appeal is that it's a stubbornly non-traditional game. Instead of blowing things up, players build things either on their own or together, block by block. There's, strictly speaking, no finish line to reach or set goal to achieve - the world is limitless and open-ended. The game enjoys wide popularity among both boys and girls and, among other applications, has even been used by the UN as a tool to allow young people in impoverished areas to "redesign" their real-world surroundings.

All of which is to say that Minecraft is making an indelible imprint on an entire generation of kids around the world - a generation that Microsoft desperately wants to target. It's no secret that Windows is anathema to many Millennials. Among that demographic, Apple's cultural cachet - and the MacBook, iPhone, iPad triumvirate - has indisputably triumphed. Yes, the Xbox console, launched in 2001, has helped Microsoft connect with younger gamers, but its Surface tablets account for a paltry 2 percent of the market, while only three out of 100 phones sold are powered by Windows software.

Nor is this merely a matter of shifting tastes. Lulled into complacency by enormous revenues from licensing its twin cash cows, Windows and Office, Microsoft came exceedingly late to the mobile and web scene. Consider that as late as 2007, then CEO Steve Ballmer forecasted, "There's no chance that the iPhone is going to get any significant market share - no chance." And by the time Microsoft finally got serious about search engines with Bing in 2009, Google had already locked up its dominance over what is now a $50 billion global market.

Miscues like that, coupled with some unfortunate releases (remember the virus-prone Internet Explorer 6 or buggy Windows Vista edition), combined to alienate an entire generation of Windows users. It's very hard to win people back. But there's now a whole new generation out there for whom Microsoft is a blank slate, with none of those negative connotations of buggy software and clunky design. Righting the company ship starts with capturing the interest of those young users, whose tastes just so happen to include an obsession with Minecraft.

Related: Microsoft's Missed Opportunity: Not Getting Minecraft's Founders?

In the months ahead, expect to see Microsoft rev up the global Minecraft machine. Already, the company has released a version of Minecraft for its Windows phones, a move designed to bolster the appeal of the phone among the younger set. (Minecraft has ranked among the most popular apps for iPhone and Android phones for several years running.) There has also been speculation that Microsoft may preload copies of Minecraft into Windows 10, slated for release in late 2015, incentivizing users to make the switch back to the platform. (It's also worth noting that Windows 10 will be free for many users, eliminating another important barrier to adoption.) Furthermore, Microsoft has emphasized that it will continue to make Minecraft available across other platforms, including direct competitors like PlayStation, a deft move to insinuate its brand among a new user base.

Nor is the Minecraft acquisition Microsoft's only nod to innovation and forward-thinking of late. A deeper look shows a company dreaming big again and dedicated to spreading its gospel far and wide across multiple platforms. From the ruins of Internet Explorer, Microsoft is developing a new cross-platform web browser called Spartan that promises to be speedier and lighter than competitors. On the mobile front, the company recently acquired wildly popular calendar and email apps Sunrise and Acompli, whose hottest features are being (or will be) rolled into a revitalized Outlook app. Microsoft has even reached out to former nemesis Samsung (incidentally, Google's most important partner in the smartphone space) to pre-install all these Microsoft apps on the newest version of the most popular Android phone line, the Galaxy S6. In the face of this sudden flurry of innovation, Forbes tech writer Gordon Kelly has gone so far as to call Microsoft "the new Google."

How well the Minecraft acquisition will fit into this revamped Microsoft vision - and whether the game can indeed sell a new generation on Windows - remains to be seen. Other hit games in recent memory - Zynga's FarmVille and Rovio's Angry Birds come to mind - also briefly captured the popular imagination, only to quickly recede into a sea of newer diversions. At the same time, some Minecraft fans have already expressed concerns over how acquisition by a tech giant - and inevitable efforts to monetize - may compromise the game, nurtured for years by a quirky independent studio.

For the moment, however, my nephew can't get enough Minecraft, which - whether he knows it or not - makes him a loyal Microsoft customer.

Related: What Minecraft Is Teaching Your Kids About Money

Ryan Holmes

CEO, HootSuite

Ryan Holmes is the CEO at HootSuite.

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