The Investing Lessons of Minecraft

Minecraft is capturing attention like no game since Angry Birds, which even has its own "Star Wars" edition. Publisher Mojang recently announced the 10 millionth download of the PC version of the game via Twitter.

And that's just one sign of how huge this franchise has become. According to Digital Trends, Mojang had sold 15 million copies of Minecraft overall. The company booked $240 million in revenue last year.

An 8-bit departure from the likes of Sim City, which has caused trouble for Electronic Arts (NASDAQ: EA  ) in recent weeks, or Microsoft's (NASDAQ: MSFT  ) megahit Halo series, Minecraft is a throwback that includes the sorts of in-app purchasing features that fueled Zynga's (NASDAQ: ZNGA  ) earnings in years past.

Publishers should take heed, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following video. While there will always be a market for complex titles that cater to hardcore fans, simple games that entice 7-year-olds as easily as 37-year-olds are capturing more of the market than ever before.

Do you play Minecraft? Have you made in-app purchases? Please watch this short video to get Tim's full take, and then leave a comment to let us know what you think of the game, and whether it can grow to become the next Angry Birds.

While Activision Blizzard and Microsoft have been taking the headlines when it comes to console gaming, Fools following the gaming sector would do well to also keep tabs on Electronic Arts. We can help. Our new special report breaks down the risks and opportunities facing the company to help you decide if EA is right for your portfolio. Click here to get your copy now.


Read/Post Comments (5) | Recommend This Article (2)

Comments from our Foolish Readers

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  • Report this Comment On April 27, 2013, at 6:41 PM, Grett wrote:

    This article is misleading when it comes to in-app purchases for Minecraft. First, the statement "Minecraft is a throwback that includes the sorts of in-app purchasing features that fueled Zynga's earnings in years past" implies that Minecraft is a mobile game whose sales are dependent on in-app purchases. In reality, Minecraft is a PC/OSX/Linux game that was ported to Android, iOS, and XBLA (somewhat contrary to the end of the article's assertion that the PC is dying). The only in-game purchase available is currently in alpha development and concerns server hosting for multi-player(http://mojang.com/2013/03/what-is-minecraft-realms-anyway/), NOTHING like what Zynga offers. This is a completely different business model.

    Not to mention Mojang is more of a developer than publisher, like EA.

  • Report this Comment On April 27, 2013, at 7:44 PM, LordSquidworth wrote:

    Assuming you don't play many games if you're thinking EA is a good investment.

    They've done nothing but piss of gamers for two years now.

  • Report this Comment On April 27, 2013, at 8:16 PM, RobertLB1 wrote:

    In a world where graphic are king, Minecraft reminds me of computer games that I played in the 1990's. Minecraft might be an interesting game if they updated their graphics. Minecraft's poor graphics will prevent me from playing it anytime in the future.

  • Report this Comment On April 27, 2013, at 8:38 PM, so1tgoes wrote:

    These games are only similar in that they both have turned a big profit, and neither experience can be easily duplicated by other companies. The profit stems from their small development budgets which allows them to move more units because of a low price point. More importantly, these games each hit a niche that has subsequently created their fame and fortune.

    Unfortunately for investors, but good for gamers, there are now hundreds of developers throwing games out hoping one will have this kind of success. So not only is investing basically a game of roulette, most of these games don't need the start up funds because of their small development teams.

    Otherwise these games have nothing in common. One you play to burn a few minutes while riding on the subway, while the other consumes 100's of hours creating whatever you can imagine.

  • Report this Comment On April 27, 2013, at 10:45 PM, swoony wrote:

    Grett is correct, Minecraft has no in-app or recurring payment billing model. It is a one time purchase much like the traditional PC games the article maligns.

    Now 10 million sales at $29 a pop is nothing to sneeze at given the low development budget here, but once this product hits saturation and new users start to dry up then the bubble bursts.

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