Concurrent users volume is critical to Digital Monetization – Twitch+Amazon, now Microsoft+ Minecraf

The online gaming industry is fast moving from niche collective enthusiast to mass market. The recent acquisition in august of Twitch, the online gaming spectator portal by Amazon over Google for just under $1 billion in cash speaks volumes. The numbers speak for themselves with top gamers enjoying online real time sessions with over 20,000 simultaneous unique spectators it’s the new way to interact in the digital sharing economy. As Emmett Shear, the CEO of Twitch said in his open letter on accepting the Amazon bid, “It’s almost unbelievable that slightly more than 3 years ago, Twitch didn’t exist”. It’s a phenomenon of our time and companies are realizing, particularly the media and cloud giants that it’s a fast evolving new business model.

Minecraft made over $100 million last year and has over 100 million registered users and 14.3 million copies of the software game on the PC. It is another case of a blockbuster software investment to drive the gaming platform industry. As with the latest FPS shooter “Destiny” launch on PS4 its big business with over $1 billion in sales predicted within a weekend ! and growing with the mega hit driven by the large online gaming communities. Microsoft Xbox like others are always seeking to drive new audience volume and Minecraft is a logical move to investing in the top games as big business follows the traffic numbers in the digital world.

With Satya buying Minecraft , I think its a reflection of the “platforming” strategy that he and others recognize as critical to building a strong customer base. In the digital world the number of concurrent users directly drives many recurring revenue charging models common in the cloud monetization strategy. It fits Satya’s strong leanings towards the mobile+cloud+services model which is all about the connected volume of this. Satya stated Xbox as a separate area but this acquisition demonstrates it’s still very much a core platform for user traffic generation.

These ideas and comments appeared in various recent Media coverage for Warwick Business School

• Microsoft pays $2.5bn for Minecraft maker Mojang, Joe Miller, BBC, Sept 15 2014 http://www.bbc.co.uk/news/technology-29204518

• Microsoft CEO Nadella’s First Blockbuster Deal May Be $2B Minecraft Maker Acquisition, Steve Burke , CRN.com, Sept 10, 2014 http://www.crn.com/news/components-peripherals/300073987/microsoft-ceo-nadellas-first-blockbuster-deal-may-be-2b-minecraft-maker-acquisition.htm

• Microsoft Can Use Minecraft Maker Purchase to Drive More Traffic, Brittany Umar, The Street, on-air interview, Sept 10, 2014 http://www.thestreet.com/video/12874643/microsoft-can-use-minecraft-maker-purchase-to-drive-more-traffic.html

• Microsoft will Entwickler des Spiels “Minecraft” kaufen, Die Welt, 10 Sept 2014 http://www.welt.de/newsticker/dpa_nt/infoline_nt/computer_nt/article132093511/Microsoft-will-Entwickler-des-Spiels-Minecraft-kaufen.html

• Minecraft purchase is the first building block in Microsoft’s new strategy, The Conversation , Sept 12, 2014 https://theconversation.com/minecraft-purchase-is-the-first-building-block-in-microsofts-new-strategy-31598

• Microsoft close to buying Minecraft-maker Mojang for $2B, CBC News, 15th Septmeber 2014 http://www.cbc.ca/news/business/microsoft-close-to-buying-minecraft-maker-mojang-for-2b-1.2763024

• Many other syndications.

#Amazon #Microsoft #Gaming #Monetization #DigitalEconomy #MA #CX