There was a time when Microsoft had a poor record with acquisitions. However, since the purchase and failure of Nokia's Lumia smartphone brand, the company has been on a hot streak. Sure, there are missed steps along the way, but for every Beam/Mixer there has been a GitHub, Mojang, and LinkedIn.
Looking at acquisitions the company has made in the gaming realm in recent years, Microsoft has been aggressively pursuing exclusivity. In other words, the company has been snapping up game studios to drive first-party titles on its Xbox consoles.
In an interview with GamesIndustry, the people helping to run Microsoft's gaming division spoke about this strategy. However, it is clear the focus is not on buying companies to work under Microsoft. It is more about buying developers that can add their own voice to exclusive games on the Xbox platform.
According to Microsoft's executive vice president of gaming, Phil Spencer, the acquisition of Mojang was a turning point. Mojang was sitting on the biggest game in the world, Minecraft, when Redmond bought the company for $2.5 billion in 2014. Microsoft used the acquisition to develop Minecraft into a platform, and it is now the biggest game ever.
Spencer points out Microsoft learned from the company about how to properly integrate a new games studio.
“Mojang was a big point for us, where it was obviously a large acquisition, with an incredible franchise in Minecraft,” Spencer said. “But Minecraft is not a non-complex product. It's on a lot of platforms, it is very community-led. Our ability to integrate Mojang and grow Minecraft also gave us confidence.”
“We had a lot to learn from Mojang. It would be easy for a large organization to come in and say: ‘Hey, we're going to show you how it's done. We're going to get you off this Java code. We're going to get things moved over to C. We're going to get you off Amazon Web Services and over to Azure.' But it's important to realize that the conditions that created Minecraft, how it came to be, are likely to be things that are difficult to recreate within a more corporate structure.”
Mojang Studio head Helen Chiang admits there was concern within the company when Microsoft came calling. She says many acquisitions of this nature end in the purchasing company assuming all control and diluting what made the original company successful.
“A lot of times you see big companies buy smaller companies, and it's easy to lose the magic of what you've purchased. It was really important that this acquisition was about retaining all of that great talent within the studio, and ensuring that you're continuing to foster that creative spirit,” Chiang explained.
Mojang give Microsoft a blueprint for success. Buy game studios under the Microsoft Game Studios banner but let them operate independently for the most part. Allow those developers to do what they're good at. This integrated yet hands-off approach has also been extended to other areas of Microsoft's business, says Chiang.
“Mojang really helped set the stage for how Xbox acquired and integrated all of the additional studios. Before, Microsoft acquired companies in a specific way. And this not only set the foundation for additional game studios, but when you look at LinkedIn and GitHub, they also have this minimally integrated approach. That really was something that Mojang set the foundation for.”