Here's Why Microsoft Might Spend $2 Billion On A Video Game With No Ending

On Tuesday, the Wall Street Journal reported that Microsoft was close to acquiring Mojang AB, the Swedish indie game company that makes the popular game "Minecraft."

In fact, Microsoft could be willing to shell out $2 billion for the company, which would make it the first multi-billion-dollar acquisition since CEO Satya Nadella took the reins.

But what exactly is "Minecraft"? And why would Microsoft pay $2 billion to own it?

Let's take a look.

The Game

"Minecraft" is a huge, open-world sandbox game, which was released for the PC in 2009. Since then, it's been released on other platforms. And it was just released last week on the current-gen Xbox One and PlayStation 4. It's also available for Android and iOS.

Players are charged a one-time fee to download the game: Around $27 for computer versions, $20 for the console versions, and $7 for the phone versions.

The game looks like a huge gridded landscape, with various blocks representing trees, dirt, rocks, etc. The landscape is "procedurally generated," which means that content is generated via an algorithm, and can basically be infinite. And there's an in-game time system, which cycles through day and night.

In fact one person has an entire site dedicated to trying to reach the end of "Minecraft." It's just him walking.

There are various activities you perform in the game: combat, exploration, crafting, gathering items, and building things. There are no specific goals, but there are different modes.

There's Survival mode, which is the most "game"-like mode, with objectives and different difficulty levels. There are baddies that come out at night, and there's a health bar that players need to check up on.

In this mode, players can die if they're not careful. But in order not to die, they can craft weapons, armor, and food, using materials that they find. This mode also features a bartering system, so players can get better resources to make better items.

There's an Adventure mode, which is similar to Survival mode, but players follow maps that other players have created. There's also a Multiplayer mode, where people can interact.

Probably the most well-known mode when you think of "Minecraft," though, is Creative mode. That's where players have no objectives and can do anything they want, like walk around, gather items, or build amazing things.

Players have the freedom to use their imaginations and build things, without worrying about health meters and bad guys.

Building in "Minecraft" is easy. You get tools, like shovels and axes, to chop down trees and cut through stone. And without a time limit or a place to go, some players have taken their creative freedom to the next level.

People can also download different "mods" and "skins," which makes the gameplay even more personalized. And the console versions offer players downloadable content and expansion packs, sometimes versions that are specific to that particular console.

Who's Playing

In February, the creator of "Minecraft," Markus "Notch" Persson, announced that the original version of the game had reached 100 million users.

That's not to mention the other versions of the game, which have also sold millions of copies.

"Minecraft" was the best-selling game on the PS3 again last month, a spot it's occupied since it was released last December. It was in the Top 5 on the Xbox 360. It's also currently No. 1 in the Google Play and iOS app stores for paid games.

And millions of people are watching other people play on the video-streaming site Twitch, which Amazon recently bought for $800 million.

Google PlayHere it is at No. 1 again.

The Future Of 'Minecraft'

And it just keeps getting bigger. Last year, Mojang generated $326 million revenue, with $128 million in profits. More than 90% of the revenue came directly from sales of "Minecraft."

YouTube/design3channelMarkus 'Notch' Persson.Then there are the licensing deals. It's generated sales from licensing deals with Lego, as well as other companies that make "Minecraft"-branded clothes. And in February, Persson announced that his company is in talks with Warner Bros. Pictures to make a "Minecraft" film.

There are also guide books, and even a series of children's books.

It seems like a marketer's dream: The foundation has been laid for the money to keep pouring in, both with sequels and more licensing deals.

Some players, however, are afraid of what a Microsoft buyout would mean for them and for the game.

"A lot of them have seen Minecraft and Mojang by extension as the forerunner to the indie game development scene," Tommy Carpenter, lead editor of Minecraft Forum, told The Wall Street Journal. "To them the idea of an independent company getting acquired by a larger corporation is just foreign. They don't understand what would cause that to happen."

But owning the game, and the company behind the game, would be a huge boost to the Xbox One, which has consistently lagged behind the PlayStation 4 in sales. The game also hasn't yet been adapted to be played on Windows phones and tablets, yet another place Microsoft is lagging behind competitors. And it isn't available for Windows 8.

For a huge company such as Microsoft, $2 billion might be a drop in the bucket for a sense of security in the highly competitive world of video games. Consider that Amazon just paid nearly $1 billion for a company that streams videos of people playing video games.

This wouldn't be the first time that Mojang was in talks for a potential acquisition. In March, Persson tweeted that he'd turned down $2 billion before. But perhaps Microsoft is the partnership the indie company has been waiting for.