The Risk of Acquiring Game Companies – Read this, Microsoft

The Risk of Acquiring Game Companies – Read this, Microsoft

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Choosing to buy a game company comes with a lot of risks and it is important to heed them because if they are ignored, efforts and money would be wasted. Microsoft has been silent about the reports going around the web that it’s planning to buy Mojang, the company behind Minecraft but people who are familiar with the matter have shared some information and according to them, the deal, which the company is reportedly announcing this week, would cost $2.5 billion.

Minecraft is a very successful and popular game and it has a lot of fans but these fans are probably the ones who have already moved on to a new popular game. For $2.5 billion and no guarantee that the company will be able to produce another hit game, Microsoft must have a brilliant and logical explanation for this supposed acquisition.

What’s popular today might not be enjoying the same spotlight tomorrow, just like other blockbusters had been.

Take King and Zynga, for example. Both companies have had its fair share of runaway success with Candy Crush Saga and Farmville, respectively. However, both have also slid down hard since their stint at the top. From a $10 IPO, Zynga’s share price is now $2.92 while King’s $22.50 share price debut has now sank to $13.19.

Rovio was also introduced to success because of Angry Birds. But gamers’ interest was not really able to last longer as new exciting games are being released every day. Its profit was down 52 percent last year. The company is continuing to struggle financially that its CEO is stepping down before the year ends. Imagine if someone had bought Rovio during its peak – he would have made the worst decision in his life.

Clash of Clans is another successful game that made its maker, Supercell, $272 million richer. But since that astonishing number, the game has steadily slid down the charts. While Clash of Clans, alongside Candy Crush Saga, still tops the top grossing charts, its profit is a sign that it won’t be there for long now.

Minecraft may be a less risky purchase since it has features that you won’t find in other hit games. It can also potentially grow if the company decides to make it a bigger multiplayer game and incorporate more features to keep its players interested longer.

However, like in so many hit games, it’s very hard for a game to maintain its spot at the top. Eventually, the players would get bored and start to look for something new – something that their current favorite game does not have.

Minecraft is already available on Microsoft’s Xbox but so it is on Apple and Google. The game’s cross-platform capability has helped the game become a phenomenon success, so unless Microsoft managed to remove it from other platforms, Minecraft will continue to make money for Microsoft’s rivals.

Microsoft may have something up in its sleeve for acquiring Mojang, like an edition exclusively for Xbox that could generate more sales. But that won’t change the fact that gamers will eventually get bored and will crave for something new – that’s how it is when it comes to hit games.